Uruguay has amended its Non-Resident Income Tax regulations to revise the treatment of distributed dividends and profits, applicable tax rates, exemptions and withholding obligations under its 2025–2030 National Budget Law.
Uruguay has published Decree No. 427/026 of 1 October 2026, introducing rules for withholding tax on dividends and profits under Budget Law No. 20.446 of 16 December 2025.
The decree amends Decree No. 149/007 of 26 April 2007, which regulates the Non-Resident Income Tax (Impuesto a las Rentas de los No Residentes – IRNR). Signed by President Yamandú Orsi, Economy Minister Gabriel Oddone and members of the Council of Ministers, the measure updates provisions governing the taxation of income distributed to non-residents.
Taxable dividends and profits
The decree replaces Article 6 of Decree No. 149/007 to revise the rules determining the scope of taxable dividends and profits distributed to non-residents.
Under the amended Article 7, IRNR applies to distributed dividends and profits only up to the amount of net fiscal income (renta neta fiscal). The taxable amount must also be calculated in proportion to each partner’s or shareholder’s ownership interest.
Fiscal losses from previous financial years must be excluded when calculating net fiscal income for this purpose.
Revised IRNR tax rates
Article 3 of the decree amends Article 22 of Decree No. 149/007, setting out the applicable rates under the Other Income (Otras rentas) category.
The revised rates are:
- 7%: Dividends, distributed profits under Literal C, Article 19 of Title 8, and deemed dividends or profits under Article 14.
- 30.25%: Income derived from real estate in Uruguay obtained by entities domiciled, resident or located in low-or-no-tax jurisdictions (BNC or tax havens), or entities benefiting from a special low-or-no-tax regime. Natural persons are excluded.
- 25%: Other income obtained by entities in low-or-no-tax jurisdictions, excluding dividends or profits paid or credited.
- 12%: The general rate applicable to all remaining income categories.
Exemptions for dividends and profits
Article 4 amends Article 23 of Decree No. 149/007 to specify circumstances in which distributed dividends and profits are excluded from or exempt from IRNR.
The provisions cover dividends paid by taxpayers subject to the Economic Activities Income Tax (IRAE) that arise from fiscal years beginning on or after the entry into force of Law No. 18.083 on 27 December 2006.
Profits distributed by personal companies are exempt where their annual gross revenue does not exceed 4,000,000 Indexed Units (UI).
The decree also provides for an exemption for dividends distributed by qualifying foreign entities where the income is taxed in the beneficiary’s jurisdiction of residence and that jurisdiction grants a foreign tax credit for the Uruguayan tax paid.
Withholding obligations and tax refunds
Article 5 replaces Article 34 of Decree No. 149/007, setting out withholding requirements and procedures for dividends and profits paid or credited to IRNR taxpayers.
IRAE taxpayers and designated foreign entities must act as withholding agents when making these payments or credits.
Where the Uruguayan tax withheld cannot be credited, either fully or partially, in the beneficiary’s jurisdiction of residence, the uncredited amount will be refunded to the taxpayer once the lack of credit has been demonstrated.
The withholding obligation also applies where the underlying income has been attributed to the beneficiary under a Controlled Foreign Corporation (CFC) or similar regime in the beneficiary’s jurisdiction of residence, provided that a tax credit is granted there.
The Uruguayan Tax Authority (Dirección General Impositiva – DGI) may establish the implementation requirements and simplified procedures for applying these provisions, particularly where the relevant jurisdiction does not tax dividends or profits or does not grant tax credits.
Entry into force and implementation
Decree No. 427/026 was enacted in Montevideo on 1 October 2026. Its final article contains the standard promulgation and filing provisions.
The decree forms part of Uruguay’s implementation of the amendments introduced by Law No. 20.446 and updates the existing regulatory framework for the taxation and withholding of dividends and profits distributed to non-residents.
