Resolution No. 1.517/2026 sets out the operational framework for the collection of tax on foreign income under amendments introduced by Law No. 20.446, including withholding procedures, dividend allocation rules, foreign tax credits and transitional compliance measures.
Uruguay’s General Tax Directorate (DGI) has issued Resolution No. 1.517/2026, establishing detailed rules for the collection of tax on foreign income earned by individuals from 1 January 2026 under changes introduced by Law No. 20.446.
The resolution published on 30 June 2026, implements provisions contained in Articles 653 and following of Law No. 20.446 of 16 December 2025 and Decree No. 95/2026 of 6 May 2026. The legislation amended the Personal Income Tax (IRPF) treatment of income derived from non-resident entities, while the decree authorised the implementation of withholding regimes and rules governing tax credits for taxes paid abroad.
Withholding and reporting requirements
The DGI has amended several provisions of Resolution No. 662/2007. The revised rules update reporting obligations for designated withholding agents, requiring declarations to include the total amounts subject to withholding, broken down by applicable rate, together with the corresponding withheld tax. The resolution also repeals numeral 22 bis of Resolution No. 662/2007.
Dividend allocation rules
The new framework revises the rules governing the allocation of provisional profits and dividends for withholding purposes. Where distributions exceed specified thresholds and originate from both taxable and non-taxable IRAE income, the excess will generally be treated as taxable under IRAE unless non-taxable income exceeds 90% of total income for the fiscal year, in which case only 5% of the excess will be regarded as taxable under IRAE.
The resolution also establishes a detailed order for allocating dividends or profits distributed by non-resident entities. Distributions must first be allocated to income imputed or assigned up to 31 December 2025, followed by Uruguayan-source income subject to the Non-Resident Income Tax earned before that date. After those amounts are exhausted, allocations will apply to income imputed from 1 January 2026, pure Uruguayan-source capital income subject to the Non-Resident Income Tax, and finally to income generated from that date that is not subject to the applicable imputation and allocation regimes.
Foreign tax credits and valuation
The resolution introduces operational guidance on verification of foreign taxes paid through imputing entities, tax credits for indirect transfers, and proof requirements for fiscal cost and foreign taxes.
It also sets out rules for determining the fiscal cost of investments acquired before 31 December 2025, permits the use of Bloomberg financial data for valuation purposes, and provides guidance on the compensation of negative results and the application of exchange rate rules.
Additional compliance measures
Further provisions address the allocation of dividends distributed by IRAE taxpayers, exclusion from imputation regimes where income has already been taxed under IRAE, withholding rules for ownership chains involving resident and non-resident entities, and exclusions for qualifying collective investment funds operating under conditions of free competition.
The resolution also clarifies custody definitions for resident entities acting through non-resident custodians, introduces options for definitive withholding and simplified regimes, and establishes payment schedules for capital income from abroad.
Transitional provisions
Resolution No. 1.517/2026 includes transitional measures extending deadlines for certain withholding and payment obligations until October 2026 to facilitate implementation of the new rules.
The resolution was signed by Director General of Taxes Gustavo González Amilivia.
