Executive summary

• The regime is contained in Article 24-BIS of Title 7 of the 2023 Consolidated Tax Code, introduced by Article 648 of Law N.º 20.446.
• It is available to individuals who become Uruguayan tax residents on or after 1 January 2026.
• The maximum period is the fiscal year in which residence changes plus the following ten fiscal years, producing a potential eleven-year window.
• The election applies exclusively to income under Article 6(2) of Title 7: certain capital income from non-resident entities and capital gains linked to the relevant assets.
• An individual who satisfies the more-than-183-day physical-presence test in each year may qualify without a specific investment. Alternative statutory routes include real estate exceeding 12.5 million UI or annual capitalisation of at least 625,000 UI in qualifying funds.
• Immigration residence, tax residence and the Tax Holiday election are separate legal concepts.

Why the Tax Holiday became more significant in 2026

Law N.º 20.446, enacted on 16 December 2025 and published on 8 January 2026, expanded the Uruguayan individual income tax treatment of certain foreign income received by residents. The tax authority, the Dirección General Impositiva or DGI, confirmed that from 1 January 2026 the IRPF framework includes foreign movable and immovable capital income and certain foreign movable and immovable capital gains.

This broader general regime makes the impatriate election more important. Without a special election, qualifying foreign income may fall within IRPF. Under Article 24-BIS, an eligible new resident elects IRNR treatment for the expressly covered category. Because IRNR is based on Uruguayan-source income, the practical result may be no Uruguayan tax on the qualifying foreign income.

The regime should therefore be understood as a targeted, temporary and conditional election, not as a general statement that Uruguay never taxes foreign income.

Tax residence and the Tax Holiday are two separate legal layers

The first step is to become a Uruguayan tax resident under the ordinary residence rules. The DGI recognises several independent tests, including more than 183 days of physical presence, vital interests, the principal centre of activities and certain investment-based presumptions.

The second step is to exercise the Article 24-BIS impatriate election. An individual may be a Uruguayan tax resident without benefiting from the Tax Holiday because the conditions are not met, the election is not made or the relevant income falls outside the statutory scope.

Immigration residence

Immigration residence concerns the legal right to live in Uruguay. It does not, by itself, determine tax status.

Tax residence

Tax residence determines the individual’s tax regime for a given year. It must arise under a recognised legal test and, where required, be documented before the DGI.

Tax Holiday election

The Tax Holiday is an additional tax election available to certain new tax residents and only in relation to the income expressly covered by Article 24-BIS.

Why the regime can last eleven fiscal years

Article 24-BIS allows IRNR treatment for:

1. the fiscal year in which the change of residence occurs; and
2. the following ten fiscal years.

An individual becoming tax resident in 2026 may therefore remain within the regime from 2026 through 2036, provided the statutory conditions are met and the election is validly made.

The clock starts with the change of tax residence. It does not start when the first dividend is distributed, when securities are sold or when a later property is acquired. Timing the relocation and major transactions is therefore an essential part of the analysis.

Which income may receive the 0% practical treatment?

The election is expressly limited to Article 6(2) of Title 7. The category principally includes:

• capital income arising from non-resident entities; and
• capital gains relating to the assets capable of producing that income.

Depending on legal classification and structure, the regime may include certain foreign dividends, interest, fund distributions, securities and gains on foreign financial assets. The 2026 reform also strengthened attribution rules for income earned through foreign entities where the Uruguayan resident is the beneficial owner.

Each asset and each cash flow must be classified separately. The same individual may receive qualifying dividends, non-qualifying consulting fees, property income requiring further analysis and derivative gains outside the Article 24-BIS election.

Income not automatically covered

• employment income and salaries;
• professional or consulting fees for work performed from Uruguay;
• profits from an operating business in Uruguay;
• Uruguayan-source income;
• financial derivatives, which are addressed separately in Article 6;
• every form of cryptocurrency gain, staking, decentralised finance or perpetual contract;
• income that cannot legally be brought within the covered categories.

Eligibility requirements under Article 24-BIS

The individual must become a Uruguayan tax resident on or after 1 January 2026. The person must not have been a Uruguayan tax resident during the two immediately preceding fiscal years and must not have used the former Article 24 regime, subject to specific transitional provisions.

The election may be made once and requires one of the statutory routes.

Route 1: more than 183 days of physical presence

An individual who satisfies the physical-presence residence test in each fiscal year may make the election without meeting the Tax Holiday’s specific investment thresholds.

This is generally the most coherent route for a family or entrepreneur who genuinely moves the centre of life to Uruguay. The DGI counts all days of physical presence, subject to specific rules for transit passengers and sporadic absences.

Route 2: real-estate investment exceeding 12.5 million UI

The law provides a route based on Uruguayan real estate with a value exceeding 12,500,000 Indexed Units, subject to the conditions established by implementing regulations.

On 29 July 2026, one UI was UYU 6.6276 and the latest available interbank US-dollar rate, dated 28 July, was UYU 40.214. The threshold was therefore approximately USD 2.06 million. This is an indicative conversion only: the legal threshold is denominated in UI and must be recalculated at the relevant date.

The 12.5 million UI threshold is not itself the general tax-residence test. The DGI separately recognises, among other presumptions, real estate exceeding 15 million UI or real estate exceeding 3.5 million UI combined with at least 60 days of presence. A 12.5 million UI property may therefore satisfy the Tax Holiday investment condition without independently resolving tax residence.

Route 3: annual capitalisation of qualifying investment funds

The third route requires annual capitalisation of at least 625,000 UI in investment funds financing productive projects, research or innovation applied to production, in accordance with implementing rules.

Using the indicative values of 29 July 2026, the amount was approximately USD 103,000 per year. The statute does not support the broad claim that any payment to a local fund or a so-called national innovation fund will qualify. The vehicle, project, form of capitalisation and holding obligations must be verified before funds are committed.

Purely illustrative example

This example is purely illustrative and does not account for the investor’s individual tax, estate, treaty or financial circumstances.

A European entrepreneur becomes a Uruguayan tax resident in 2026 and spends more than 183 days per year in the country. Her foreign portfolio produces USD 180,000 in annual dividends and USD 70,000 in annual interest.

If the USD 250,000 falls within Article 6(2), the Article 24-BIS election is validly made and the conditions continue to be satisfied, the Uruguayan tax on that income may be nil from 2026 through 2036.

This does not make the income tax-free worldwide. The jurisdiction of the company, bank or issuer may impose withholding tax. The former country of residence may challenge the relocation, apply an exit tax or tax certain income under domestic law and the relevant treaties.

When the regime may matter to an international investor

The Tax Holiday may improve the efficiency and predictability of a genuine relocation where substantial capital income arises outside Uruguay. It is particularly relevant for:

• entrepreneurs receiving dividends from foreign companies;
• investors holding international portfolios of shares, bonds and funds;
• founders preparing a significant sale or distribution, subject to the former country’s rules;
• HNWI families seeking legal stability and geographic diversification;
• property investors combining a real home in Punta del Este, José Ignacio, Montevideo or another Uruguayan location with international wealth planning.

Tax should not be the only reason for relocating. Substance, family life, legal stability, governance and source-of-wealth documentation remain equally important.

Risks and points requiring attention

The former country may continue to treat the individual as resident

A Uruguayan certificate does not necessarily terminate tax residence in France, Belgium, Spain or another jurisdiction. Permanent home, centre of vital interests, principal activity, effective management of companies and treaty rules must be reviewed together.

Foreign withholding taxes remain

The Tax Holiday affects Uruguayan tax. It does not automatically eliminate withholding imposed by the country of the company, bank, issuer or property.

Interposed entities may be fiscally transparent

The 2026 reform contains attribution rules for certain foreign-entity income where the resident is the beneficial owner. An offshore holding company does not guarantee indefinite tax deferral.

The administrative procedure requires confirmation

As of 29 July 2026, the DGI continued to publish Form 0306 for the former Article 24 regime, expressly limited to foreign movable-capital income. A fully consolidated public procedure, final form and filing calendar for the new Article 24-BIS regime were not yet available on the DGI website.

Investment implementation rules are decisive

The statute delegates the detailed requirements for qualifying real estate and funds to implementing regulation. Capital should not be committed solely on the basis of a marketing presentation or an approximate US-dollar conversion.

What happens after the eleven-year period?

After the initial period, the ordinary IRPF regime may apply. Article 24-BIS also provides potential post-holiday elections.

One option permits taxation for five fiscal years at 50% of the normally applicable rate on the same categories of income. If the reference rate remains 12%, the arithmetic result would be 6%. This is not a guaranteed 2037 rate: the law, rates and the taxpayer’s circumstances must be reviewed at the relevant time.

The option requires, among other alternatives, annual capitalisation of 625,000 UI in qualifying funds or a real-estate investment exceeding 6.25 million UI. The statute also provides fixed annual IRPF options for taxpayers with exceptionally high foreign income.

Uruguay’s position in international wealth mobility

Uruguay does not base this regime on nationality or the purchase of citizenship. It is designed around genuine tax residence and the attraction of internationally mobile capital. Its distinctive elements are a temporary window for defined foreign income, thresholds denominated in inflation-linked UI and access through either physical presence or investment.

Any comparison with other jurisdictions should include the former country’s exit rules, legal stability, treaty network, withholding taxes, succession, wealth taxation, corporate substance and quality of life. A nominal 0% rate alone is never sufficient to identify the most appropriate jurisdiction.

Recommended steps before relocating

1. Map current tax residences and the conditions required to terminate them.
2. Classify each income stream: dividend, interest, rent, gain, salary, fee, derivative, digital asset or entity distribution.
3. Select a robust Uruguayan tax-residence route and prepare supporting evidence.
4. Model withholding taxes, foreign tax credits and potential exit taxes.
5. Confirm the Article 24-BIS filing procedure with the DGI or qualified Uruguayan tax counsel.
6. Where eligibility depends on investment, obtain written confirmation that the property or fund qualifies before committing capital.
7. Maintain annual records of presence, investment, income and asset ownership.

Conclusion

Uruguay’s Tax Holiday can be a powerful regime for a new tax resident with significant international capital income. The statute confirms a maximum eleven-fiscal-year period and a potential 0% Uruguayan result, but only for defined income and through a valid election.

Tax residence is a separate prerequisite. The 183-day route, the 12.5 million UI real-estate route and the annual fund-capitalisation route should not be marketed as interchangeable shortcuts without explaining their legal interaction.

The correct question is not merely “can I pay 0% in Uruguay?” It is “which income qualifies, how do I properly leave my former tax residence, which source-country taxes remain and how do I document my new position over time?”

FAQ — Uruguay Tax Holiday and tax residence

Does the Uruguay Tax Holiday last ten or eleven years?

It covers the fiscal year in which tax residence is acquired and the following ten fiscal years. The maximum period is therefore eleven fiscal years.

Does the 0% rate apply to all foreign income?

No. It applies only to Article 6(2) income, principally certain capital income from non-resident entities and related gains. Employment, operating income, derivatives and other categories require separate analysis.

Must a person buy property worth more than USD 2 million?

Not necessarily. An individual satisfying the more-than-183-day residence test in each year may elect without a specific investment. The statutory real-estate threshold is 12.5 million UI and its dollar value changes.

Does a 12.5 million UI property automatically establish tax residence?

No. It is a Tax Holiday condition. Tax residence must separately arise under an ordinary residence test.

Can dividends from a foreign company qualify?

They may qualify depending on classification, beneficial-ownership rules, the ownership structure and source-country withholding. Individual analysis is required.

Are Bitcoin and other crypto gains automatically taxed at 0%?

No. Digital-asset treatment depends on the asset, counterparty, custody and form of return. Spot gains, staking, DeFi and derivatives may receive different treatment.

Is immigration residence enough to obtain the Tax Holiday?

No. The individual must become a tax resident and validly exercise the tax election. Immigration status does not replace those steps.

Does the regime eliminate tax in the country where the income arises?

No. Source-country withholding and former-country rules may continue to apply. The regime concerns Uruguayan taxation.

What should be reviewed before making the election?

The former residence exit, income classification, treaties, withholding, foreign entities, exit taxes, the Uruguayan residence test and the current filing procedure.

Sources

• IMPO — Title 7, Article 24-BIS, “Régimen de impatriados. Rentas de capital”, updated text accessed 29 July 2026.
• IMPO — Law N.º 20.446, Article 648, enacted 16 December 2025 and published 8 January 2026.
• IMPO — Title 7, Article 6, territorial scope of IRPF, updated text accessed 29 July 2026.
• IMPO — Decree N.º 95/026, enacted 6 May 2026 and published 21 May 2026.
• DGI — New categories of foreign income obtained by resident individuals, 24 July 2026.
• DGI — Tax residence tests, 20 October 2025.
• DGI — Tax Residence Certificate, 21 October 2025.
• DGI — Form 0306 instructions, page addressing the former Article 24 regime, accessed 29 July 2026.
• DGI — Indexed Unit values, 2026 data accessed 29 July 2026.
• Central Bank of Uruguay — Exchange rates, latest available rate dated 28 July 2026.

Explore a relocation project in Uruguay

Would you like to better understand relocation conditions, tax residence or the property markets of Punta del Este and Maldonado?

Punta Select Club provides a structured first point of entry, selected access to relevant information, market orientation, buyer coordination and, where appropriate, introductions through authorised local partners.