Scheduled Plane tickets to Move to Uruguay: Now New Tax on Residents?

Placeinthesun

24 July 2011 23:33:00

Hi everyone, after doing all the research, and locating the right felilitator we were all set to move to Uruguay in November. Then comes the kicker: I hear that Uruguay has implemented a tax code change that has 2 provisions. Now I am a little doubtful if Uruguay is the right destination for us and what implications the tax will have for us. I need a little help.

From what I understood so far, For citizens: a tax of 1.5% on assets abroad set to be phased out by 2017.

For residents: a tax of 12% on income from dividends abroad and bank deposits. No tax on salary, rent and what have you.

Here are the questions I would appreciate a little help with

(a) Can anyone confirm that I have understood the provisions correctly?

(b) How would the Uruguay authorities know what assets or income I have in which country?

(c) can anyone add more information to what I have?

Thanks.

dhammond

25 July 2011 01:50:51

Punta del Este

Taxes are rarely a simple matter in any country. I have seen a lot written on blogs and newsletters about what is going on with taxes in Uruguay. A lot of it is simply incorrect and other times proposals and considerations by Uruguay's legislature have been presented as decisions and final rules.

In Uruguay there are different types of taxes. The 1.5% tax that you site might be the tax called “Impuesto al Patrimonio”. This is a tax on assets. Assets are excluded up to a certain value and thereafter are taxed on a sliding scale from between 0.75% and (I think currently) 2.75%. I believe you are right, in that there is a fade out planned for this tax.

The other tax you site is new proposed tax on dividends and income abroad for people who are residents for tax purposes.(paradiseuruguayblog.com/2011/01/uruguay-income-tax-law-and-uruguay.html]Here is a link to an article written by a Uruguay attorney on this tax proposal.) There has been discussion on making a five-year exemption for new residents to Uruguay.

There are also other taxes in Uruguay. If you are hinging your decision of whether or not to move to Uruguay based on the tax code, I strongly encourage you to speak with a Uruguay accountant or qualified attorney. This way you can see how the taxes would impact your specific financial situation.

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