What changed in 2026: the new law affecting residents and expats
The 2025–2029 Budget Law (Law 20.446) has been in force since January 2026 and brings the year's biggest tax change. Here's what changed and who it affects, in plain words — with official sources.
If you live in Uruguay or are thinking of moving, this is worth knowing: since 1 January 2026 a new law changes how certain income is taxed. For most people who only invoice locally, almost nothing changes; but if you have foreign income — or you're about to move here — it does affect you. Here are the essentials, no fluff.
A new law, in force since January
The change comes in the 2025–2029 Budget Law (Law No. 20.446), effective 1 January 2026. The Ministry of Economy sums it up like this:
The source of the change, in the Ministry of Economy's own words:
«La Ley de Presupuesto Nacional (N°20.446 de 16 de diciembre de 2025) introdujo modificaciones al Impuesto a la Renta de las Personas Físicas (IRPF) aplicable a ciertas rentas de capital provenientes del exterior.»
In English: The National Budget Law (No. 20.446 of 16 December 2025) introduced changes to the Personal Income Tax (IRPF) applicable to certain capital income from abroad.
MEF — Foreign returns and capital gainshttps://www.gub.uy/ministerio-economia-finanzas/comunicacion/noticias/rendimientos-incrementos-patrimoniales-del-exterior-dgi-suspende-pagoThe big change: foreign capital income
Until now, much foreign income wasn't taxed in Uruguay. From 2026, returns and gains on capital (movable and immovable) from non-resident entities are treated as Uruguayan-source and pay IRPF, generally at 12% (a regulation can lower it to 8% when there's local withholding). In plain terms: if you earn interest, dividends or investment income from abroad, that may now be taxed here. If you only have local income, nothing changes.
DGI — Personal Income Tax (IRPF)https://www.gub.uy/direccion-general-impositiva/tematica/impuesto-rentas-personas-fisicas-irpfFor newcomers: the tax holiday got longer
There's an upside for newcomers. Anyone who becomes a tax resident from 2026 can opt not to pay IRPF on that foreign income during the year of the change and the following ten (it used to be five). The DGI puts it like this:
The option for new residents, now eleven years in total:
«el IRNR, por el ejercicio fiscal en que se verifique el cambio de residencia a territorio nacional y durante los diez ejercicios fiscales siguientes»
In English: the IRNR, for the fiscal year in which the change of residency to national territory occurs and during the following ten fiscal years
DGI — Tax Holidays for new tax residentshttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/tax-holidays-opcion-para-nuevos-residentes-fiscales-uruguayOther adjustments worth knowing
Beyond the big change, a few tweaks:
- FONASA credit can be offset against IRPF debt (if you owe IRPF, your FONASA refund may be withheld).
- For foreign capital gains there's an annual assumed-taxation option.
- The IRPF and IASS brackets were adjusted, and the 2026 BPC is $6,864.
Does it affect you?
| Your situation | Does anything change in 2026? |
|---|---|
| You only invoice in Uruguay (local services/commerce) | No — your unipersonal is unchanged |
| You have foreign capital income (interest, dividends, rent) | Yes — it may now pay IRPF (12%) |
| You're a new tax resident from 2026 | You can opt for the tax holiday (year + 10) |
In short: the big 2026 news is that certain foreign capital income now pays IRPF, with a longer tax holiday for newcomers. The régime is still being regulated, so dates and details may move: if you have foreign income, confirm your case with the DGI and an accountant. Want the basics? See our posts on IRPF and on tax residency and the tax holiday.