Uruguay is regarded as a low to moderate tax jurisdiction, and has favourable tax regulations for individuals moving to Uruguay, and also a broad range of tax advantages for the overseas investor.
Following there is a summary of the Uruguayan system:
The sorts of foreign income subjected to taxes are limited to interest and also dividends. Those are taxed at a rate of 12%. If an individual already pays taxes on those types of income elsewhere, Uruguay will not double tax him. Plus, the new legislation is expected to leave out even this kind of taxation for an individual’s first five years in the country.
Uruguay does not have any kind of “death tax” or even property tax upon a person’s passing away. This indicates that your hard earned money is left with your family. Certainly, there is no need to stress about your property lining government coffers rather than safeguarding your loved ones. You get to choose what happens to your money, all of it after you are gone.
Property taxes are minimal. On average, overall taxes on a property add up to 0.3 to 0.6% of a property’s value, per year (houses carry a “municipal” tax and also a small “public schools’ tax”). Provided the normally expensive property tax rates in the United States, this signifies large savings to potential expats searching to make the most of their retirement income.
For people starting an enterprise in Uruguay, the business income tax rate is a flat 25%.
Without regard to the amount your company gains, the tax rate never rises above the flat 25% rate.
For all those thinking about getting a job in Uruguay, personal income tax is paid in brackets that start at 10% and end at 25%, with an effective overall tax rate averaging 18% or less for even the top earners. Take note that this kind of personal income tax is for income gained in Uruguay and is different from the international income mentioned at the beginning of this article.
Uruguay is a renowned offshore jurisdiction, with the availability of corporate vehicles (“Sociedades Anonimas” or “SAs”) that have no taxes of any type (other than a flat tax of approximately USD 400 per year) on income made abroad or property and assets held out of Uruguay.
Uruguay has many Free Trade Zones (“zonas francas”), that is, locations where those companies that work from within the zone, provided that they sell services and / or products to another country, encounter no income taxes. As a result, numerous companies have been installed in these free trade zones, offering financial solutions, software, back-office operations plus many other kinds of services, to customers internationally. Uruguay is a great location to start up a successful global business.
Uruguay possesses very favourable investment promotion legislation, under which the government yearly awards large tax breaks to many hundreds of projects. Last Year, 829 projects (for a total investment of USD 1.2 Billion) were awarded tax breaks under this regulation. Uruguay grants tax breaks to investors on Corporate Income Tax (close to 100% of the quantity invested), Value Added Tax (on goods purchased) and Asset Tax. In order to be eligible and acquire the advantages, the investor must present a plan before a committee within the Finance Ministry, referred to as Comap, which reviews the project and assesses its effect on the introduction of new jobs, exports, technology, as well as factors such as the usage of clean energy. The law allows a wide array of industries to request the tax breaks. Projects accepted last year included companies as distinct as farming enterprises, call centers, professional services firms, movie centers, development companies and logistics companies.
Corporate Tax Rate Analysis: United States versus Uruguay
The Uruguayan governing administration seeks to stimulate overseas businesses and people to bring their investments to Uruguay. The tax laws are incredibly favourable to people from other countries that live or even operate companies in Uruguay. The government acknowledges that these foreigners are a great asset to the economy and that it’s in everyone’s best interest to entice them to come to Uruguay. This has developed the perfect financial scenarios for expats to really benefit from this foreigner-friendly plan by gaining the most out of their profits, businesses, and investment decisions.