IRPF on capital income: interest, dividends and more
Interest on your deposits and dividends also pay IRPF (Category I). How much: 12% general, 7% in several cases, and reduced rates for deposits. Explained with official sources.
IRPF doesn't only tax your work: it also taxes your capital income. If you have a term deposit, receive dividends or lend money, that's taxed too. The good news is the rates are usually low and often the bank already withholds for you. Here's the picture.
What capital income is
The official definition is broad:
Per the DGI:
«Se consideran rendimientos de capital mobiliario, las rentas en dinero o en especie, provenientes de depósitos, préstamos y en general de toda colocación de capital o de crédito de cualquier naturaleza.»
In English: Capital income is considered to be income in cash or in kind from deposits, loans and, in general, any placement of capital or credit of any nature.
DGI — IRPF capital incomehttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/irpf-rendimientos-capital-mobiliarioThe rates: it isn't just one
Many think everything pays 12%, but there's a scale. The general rate is 12%; dividends paid by Uruguayan companies (IRAE taxpayers) usually pay 7%; and bank deposits have reduced rates by currency and term (e.g. longer terms pay less).
Plainly: the longer your deposit's term, the lower the rate — and in pesos beyond 3 years it can be very low. Since rates depend on the instrument, it's worth checking your specific case with the DGI before doing the math.
Who withholds
In most cases you don't have to do anything: there are withholding agents (banks, IRAE-taxpayer companies, public bodies) that withhold the tax and remit it for you. You can give those withholdings a definitive character and be released from filing a return. If there was no withholding agent, you file your annual return (form 1101).
Foreign income and new residents
If you're a tax resident, certain foreign capital income (like dividends and interest) may be taxed. But new residents have a very relevant option: to be taxed as a non-resident for a time, or a reduced 7% IRPF. We cover this in our tax-holiday and IRNR posts:
DGI — Tax holidays: option for new tax residentshttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/tax-holidays-opcion-para-nuevos-residentes-fiscales-uruguayAt a glance
| Income | Rate (indicative) |
|---|---|
| General capital income | 12% |
| Dividends from Uruguayan companies | 7% |
| Bank deposits | Reduced by currency and term |
| Who pays? | An agent usually withholds (bank, etc.) |
In short: capital income (interest, dividends, etc.) pays IRPF, with a general 12% rate but several reduced ones (7% and deposits by term), and an agent almost always withholds. Verify your case's rate with the DGI; if you're a new resident, look at the tax holiday.