Tax Benefits in Uruguay

By EasyCo Updated October 10, 2026

Uruguay combines political stability with a source-based tax system and several incentive regimes for investors. Here are the main tax benefits for companies in 2026 and the general rules they build on.

Uruguay’s strategic business environment

Investment-grade credit ratings and strong institutions
Equal treatment of foreign and local investors, with no prior authorization needed (Law 16.906)
Free movement of capital and no exchange controls
Access to MERCOSUR and a strong logistics hub in Montevideo

The general tax system

Tax	Rate
Corporate income tax (IRAE)	25%, on Uruguayan-source income
VAT (IVA)	22% standard, 10% reduced
Dividends to non-residents (IRNR)	7%
Net worth tax (IP)	1.5% for companies

Uruguay taxes income on a source basis, but since 2023 some foreign passive income of entities in multinational groups is taxed when they lack substance. From 1 January 2026, Law 20.446 also changed the treatment of some dividends; confirm it before distributing profits.

Tax advantages and incentives

Investment promotion (Law 16.906)

Projects approved by the COMAP can deduct part of the investment from IRAE and receive relief on net worth tax and VAT on purchases. The new regulation, Decree 329/025, applies to projects filed from 1 February 2026.

Software and IT services

Income from software and related services developed in Uruguay can be exempt from IRAE, provided the company meets the local substance rules.

New tax residents

Individuals who become Uruguayan tax residents can opt for a temporary exemption on foreign dividends and interest, which helps founders who relocate.

Free trade zones

Companies operating in a free trade zone (Law 15.921) are exempt from almost all national taxes on their free zone activity, including IRAE, net worth tax and VAT on goods inside the zone. Users must employ mostly Uruguayan staff, and services to the Uruguayan market outside the zone are limited and taxed.

Choosing the right setup

Each regime has its own conditions, so the choice of company type and location should follow your business plan. See how to set up a company in Uruguay.

Get help from Easyco

Easyco coordinates the company setup in Uruguay up to the issue of the RUT, and supports companies afterwards with tax, accounting, payroll and company compliance, including a registered office address. Contact us to discuss your project.