Tax & Legal in Uruguay

Uruguay entered 2025 with a stable and investment-friendly legal and tax environment. Corporate income remains taxed at 25% on a source-based principle, while non-residents face a 12% withholding rate. Recent updates provide clarity on how foreign passive income—such as royalties and IP-related earnings—is treated when linked to Uruguayan operations.

In line with OECD Pillar Two rules, Uruguay needs to carefully evaluate the pros and cons of implementing a Qualified Domestic Minimum Top-Up Tax (QDMTT), ensuring large multinational enterprises are effectively taxed at a minimum global rate of 15%. This move reinforces Uruguay’s alignment with international transparency standards.

The country continues to promote strategic investments through its long-standing incentive regime, offering tax exemptions on corporate income, VAT, and property taxes. Key sectors include renewable energy, manufacturing, agribusiness, and tech. A new Free Trade Zone was launched in Punta del Este in 2025, aimed at export-oriented and innovation-driven companies.

On the legal front, reforms have focused on enhancing regulatory clarity and institutional efficiency. Renewed tax benefits for real estate development including Montevideo’s “Ciudad Vieja”, along with pending updates to media, criminal procedure, and AML laws, reflect the government’s pro-business agenda.

Uruguay remains a reliable, rules-based jurisdiction with a forward-looking approach to both taxation and regulation.

Auren Uruguay