The Executive Branch has introduced regulations to the Personal Income Tax (PIT) rules relating to foreign-source investment income and capital gains. For prior coverage, see EY Global Tax Alert, Uruguayan Parliament approves the National Budget for 2025–2029, dated 10 December 2025.

The key aspects of the Decree are described below.

Determination of taxable income for capital gains

Exclusions from capital gains

The Decree excludes transfers for which legal effectiveness is conditional upon the death of the holder, as well as nonresident entities' distributions of foreign assets subject to the fiscal transparency regime, provided that the beneficiary holds at least 95% participation.

Determination of taxable income

For the disposal of foreign assets, taxpayers may choose between the "real" (i.e., actual) method and a simplified notional-income approach, generally on an annual basis. Income shall be recognized at the time of payment or when funds are made available, instead of at the time of disposal. If the real method results in a loss, the loss may not be offset against other income.

For foreign immovable property, income may be determined as the difference between the sale price and the fiscal value, or as a notional value equal to 15% of the sale price (effective PIT rate of 1.8%).

For other foreign assets (e.g., securities, financial instruments or equity interests), taxpayers may apply the real method or a notional value equal to 20% of the sale price (effective tax rate of 2.4%). For listed assets acquired before 31 December 2025, the acquisition cost is deemed to be their market value as of that date.

Compensation for negative results

The Decree expands loss utilization, allowing losses from capital gains to be offset across a broader range of transactions, including publicly listed and privately issued securities traded on Uruguayan stock exchanges and units of open-end investment funds.

Losses from foreign-source capital income and foreign capital gains may be offset against foreign capital income.

Foreign tax credit

Taxpayers may credit against PIT taxes paid abroad on foreign-source capital income and gains. The Decree also recognizes indirect foreign tax credits under the fiscal transparency regime, allowing underlying foreign tax paid at the entity level to be credited. Additionally, nonresident income tax paid in Uruguay on indirect transfers may be credited against PIT in specific scenarios.

Dividends and profit distributions

Distributions made by corporate income tax (CIT) taxpayers remain taxable when derived from income subject to taxation, with the definition of underlying income broadened to include capital income, foreign-source real estate income and capital gains accrued from 1 January 2026.

Tax rates

Foreign-source capital income and capital gains are subject to PIT at a rate of 12%. A reduced rate of 6% applies to certain taxpayers under the "Tax Holiday" regime once the exemption period has elapsed.

Withholding agents and advance payments

Resident intermediaries may act as withholding agents, applying an 8% rate on taxable income on a monthly basis, with the option for taxpayers to treat withholding as definitive. For 2026, remittance applies from July.

If withholding is not feasible, taxpayers must make semiannual advance payments on accrued income at 12%, which may also be treated as definitive.

Simplified regime

Eligible taxpayers with complex asset structures may opt to pay a fixed annual tax (approximately US$300,000) instead of determining PIT per category of foreign-source income.

PIT to CIT Option

Income from services provided to diplomatic missions, consulates and international organizations headquartered in Uruguay is excluded for taxpayers with income subject to PIT who may opt to be taxed under the CIT regime.

The Decree has been published in the Official Gazette on 21 May 2026. Please see the document here (only in Spanish).