Wealth tax (IPAT) for individuals: what it is and when you pay

Beyond income taxes, Uruguay has a wealth tax: the IPAT. The good news is you only pay it if your wealth exceeds a certain minimum. Here's who pays, how much, and what counts in the calculation.

What it is and who it reaches

The IPAT is an annual tax on the wealth of individuals, family nuclei and undivided estates, paid only when the fiscal wealth exceeds the non-taxable minimum. If you're below it, you don't pay.

The rates: 10% and 20%

For individuals, the scale has two brackets:

Per the DGI:

«Se aplicará el 10% a la base de cálculo hasta el doble del mínimo no imponible correspondiente, y el 20% sobre el monto que exceda el doble del mínimo no imponible.»

In English: 10% will be applied to the calculation base up to double the corresponding non-taxable minimum, and 20% on the amount that exceeds double the non-taxable minimum.

The non-taxable minimum

The key to the tax is the non-taxable minimum: a threshold the DGI updates each year. You're taxed only on what exceeds that minimum, so many people simply don't pay IPAT. The current values are published by the DGI:

Your AFAP savings don't count

An important detail for your retirement: what you've accumulated in your AFAP individual account is not computed for the IPAT.

And on the AFAP:

«Los fondos acumulados en las cuentas individuales de ahorro administrados por las AFAPs no serán computados a los efectos de la liquidación del Impuesto al Patrimonio.»

In English: Funds accumulated in the individual savings accounts managed by the AFAPs shall not be computed for the purposes of settling the Wealth Tax.

What counts

Assets such as real estate, vehicles, securities and other holdings are counted, with some limited deductions. Valuation follows specific rules (e.g. the cadastral value for real estate). That's why it's worth having an accountant prepare your return.

At a glance

In short: the IPAT taxes wealth above the non-taxable minimum, at 10% and 20%, not counting your AFAP savings. Many people never reach it. Verify the current minimum and your situation with the DGI or your accountant.