This article reviews the country’s tax landscape. Aexploring the nature and functions of the main taxes in Uruguay and offering. A comprehensive overview of the tax burden that defines economic and tax development.
The main taxes, their operation and characteristics
First of all, it should be specifie that taxes are. A type of particular tribute. A which allow the State to obtain revenue without implying. A preefine direct compensation on its part. A as establishe in article 11 of the Tax Code. ALaw No. 14,306 (1974).
The State is not oblige to allocate the funds raise by a tax to a specific activity. A rather, these funds usually finance. A public spending in general.
There may be exceptions
As is the case with the Primary Tax, where the majority of. A revenue is allocate to the Primary Education Council.
According to the principle. A of legality applicable in the country, it is the law that establishes the events and other requirements (such as the place of their occurrence) that generate. A the obligation to pay taxes, such as obtaining income or revenue, the possession of assets or assets, the circulation of products or the provision of services.
If one of these taxable
Events occurs in full compliance with the other requirements, the taxpayer is oblige to pay the tax, and/or, where applicable, the responsible third parties also indicate by law, do so on his/her behalf with the right to compensation for the same.
In Uruguay, public resources are mainly supplie by its comprehensive tax system . Overseen and administere by the General Tax Directorate (DGI) , the system covers a range of internal and customs taxes. These are essential to finance public policies and national infrastructure.
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In addition, special social security contributions constitute a significant source of income , extending beyond the purely tax sphere. These contributions apply to paid work, affecting both dependent and independent workers.
How to calculate taxes in Uruguay
Various Social Security agencies in the country are responsible for collecting these contributions, playing a crucial role in maintaining and strengthening the Uruguayan social welfare system.
In turn, in terms of classification of its instruments, the Uruguayan tax system is structure into taxes on income, on capital and on consumption , each with its own characteristics and specific purposes.
Below, we will list the main taxes in Uruguay that fall under these three levels of classification, highlighting their operation and the implications they have for various sectors of society and the economy.
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Companies with low or moderate
Economic capacity, in accordance with certain thresholds provide for by the regulations, have the option of alternative income tax buy country wise email marketing list regimes, namely: IMEBA as a definitive tax in the agricultural sector, and small business or, where appropriate, subject to additional requirements, a flat tax for business income outside of that agricultural sector.
In Uruguay, the main taxes on income are the Tax on Income from Economic Activities (IRAE) and the Tax on Personal Income (IRPF), in addition to the Tax on Income from Non-Resident Economic Activities (IRNR) and the Tax on mailing lead Allowances for Retire Workers (IASS), which tax different aspects of the income and allowances of certain taxpayers.
Income Tax on Economic Activities (IRAE)
The Tax on Income from Economic Activities in Uruguay is an annual 25% tax levie on net income generate by economic activities in the country. This tax is applie to companies and other entities that carry out profit-making or non-profit-making activities.
How the Income Tax on Economic Activities
Net income is calculate according to the recognition and valuation criteria establishe by the regulations, subtracting from the gross income the expenses necessary to obtain it, subject to compliance with a series of certain substantial and formal requirements that, depending on the case, they impose, without prejudice to the option of fictitious determination on the basis of the income obtaine expecte for certain cases.
With few exceptions, the income obtaine must be from a Uruguayan source ; that is, generate in the country by applying the principle of territoriality, and the tax is paid periodically throughout the year through advances and an eventual payment of the balance at the close of the year together with the presentation of an annual sworn declaration submitte to the DGI.
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Personal Income Tax (IRPF)
The Personal Income Tax is an annual, personal and direct tax that taxes the income obtaine by individuals residing in the country (with several exceptions) including the following categories:
Category I : includes income from the capital factor, covering returns on movable capital (including the distribution of profits or dividends by IRAE taxpayers, with some exceptions) and real estate, as well as capital gains (in the latter two cases, the regulations provide for the real or fictitious deuction of certain expenses and costs respectively): for this category the tax rate is set at 12% (with certain lower differential rates, as the case may be).
