Tax holiday 2026: the new-resident benefit, brought up to date
If you become a fiscal resident in Uruguay you can choose a special regime for your foreign income. We explain the two options, the time limits and who benefits — with official sources.
Uruguay offers a benefit known as the “tax holiday” to people who become fiscal residents: for a while, their foreign capital income pays less. In 2026 this benefit matters more than before. Here it is in plain words.
What the tax holiday is
When someone becomes a fiscal resident in Uruguay, their foreign capital income (interest, dividends) could start paying IRPF. The tax holiday lets them choose a special treatment for a period: either keep paying as a non-resident, or pay IRPF at a reduced rate. It's an option, exercised only once.
The two options
The first option is to keep paying IRNR (the non-resident tax) for the year of the residence change and the following years. The DGI puts it this way:
The option to keep filing as a non-resident, per the DGI:
«el IRNR, por el ejercicio fiscal en que se verifique el cambio de residencia a territorio nacional y durante los 5 (cinco) ejercicios fiscales siguientes»
In English: the IRNR, for the fiscal year in which the change of residence to the national territory occurs and during the 5 (five) following fiscal years.
DGI — Tax holidays: option for new fiscal residentshttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/tax-holidays-opcion-para-nuevos-residentes-fiscales-uruguayThat base 5-year period can be extended to a maximum of 10 fiscal years if the person keeps real presence (more than 60 days a year) and invests in real estate worth over UI 3,500,000 acquired after 22 January 2021. The second option, by contrast, has no time limit:
The reduced-rate option:
«el IRPF a la tasa 7% sin límite temporal»
In English: the IRPF at the 7% rate with no time limit.
DGI — Tax holidays: option for new fiscal residentshttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/tax-holidays-opcion-para-nuevos-residentes-fiscales-uruguayWhat changed in 2026
The 2025–2029 Budget Law (No. 20.446) widened which foreign capital income is taxed by IRPF (at 12%). That's why the tax holiday gains importance: for a newcomer with savings or investments abroad, choosing well between the temporary IRNR window and the 7% with no limit can change their burden a lot. The decision depends on your horizon and the kind of income.
Law No. 20.446 (Budget 2025–2029) — IMPOhttps://www.impo.com.uy/bases/leyes-originales/20446-2025Who really benefits?
Let's be honest: the benefit mainly helps people with meaningful foreign capital income (interest, dividends). If your income is basically your work, the tax holiday barely moves the needle. Those with a portfolio abroad who stay many years often look at the 7% with no limit; those planning a few years, the IRNR window. It's worth getting advice before opting.
The options at a glance
| Option | What you pay | Time limit |
|---|---|---|
| IRNR (non-resident) | As a non-resident | Change year + 5 (up to 10 with conditions) |
| IRPF at a reduced rate | 7% | No time limit |
| No option taken | IRPF 12% on capital income | Permanent |
In short: the tax holiday lets you choose between an IRNR window (year + 5, up to 10) or IRPF at 7% with no limit, instead of the general 12% on foreign capital income. It's a one-time, time-bound option, so it's worth planning. Verify the current conditions with the DGI and get advice before deciding.