The possible introduction of a tax on income earned abroad by Uruguayan residents has sparked intense debate in the political arena and the financial sector. The measure, currently under consideration for inclusion in the next draft Budget Law, could reach an estimated capital cost of $62 billion, according to official data.
A change in the scope of personal income tax
The proposal seeks to modify the current structure of the Personal Income Tax (IRPF) , which, since the 2007 tax reform, excludes capital gains generated outside the country by residents. The objective would be to expand its scope and include these incomes in the tax base, with rapid parliamentary treatment once they are incorporated into the Budget.
The economic team maintains that the goal is not to create a new tax, but rather to improve and expand existing ones. The revenue could be used to fund early childhood policies, considered a priority by the government.
Positions for and against
Social and union sectors see the measure as an opportunity to increase the progressivity of the tax system, especially within the framework of proposals aimed at increasing the contribution of higher-income sectors.
On the contrary, political and business leaders warn that such a tax could undermine investor confidence, discourage capital inflows, and alter Uruguay's image as a stable country in terms of taxation. They also point out that it could have negative effects in areas with a high concentration of investment, such as Maldonado.
Increasing capital abroad
Figures from the Ministry of Economy and Finance indicate that the assets and capital of Uruguayan residents abroad reached $62 billion in 2023, equivalent to almost 79% of the Gross Domestic Product. This growth has been significant compared to the $27.171 billion recorded in 2019.
Other measures under study
The government is also analyzing complementary initiatives, such as taxes on digital purchases abroad and adapting national regulations to the Global Minimum Tax promoted by the OECD, which would affect multinationals with operations in Uruguay.
Next steps in the discussion
The debate will remain in the spotlight until the Budget Bill is presented. In the meantime, meetings are planned between the economic team, legislators, and financial system stakeholders to assess the scope of the measure and its potential impact.
