(URUGUAY) — Uruguay has expanded its taxation of foreign-source personal income through Decree No. 95/026, issued May 6, 2026, and related measures, marking a sharp break from its older territorial approach and creating new tax and residency questions for expatriates, digital nomads, and foreign investors.

Decree No. 95/026 sets the regulatory frame for Law No. 20,446, the 2025 to 2029 National Budget Law. The decree was published in the Diario Oficial on May 21, 2026. Its practical effect is broad: Uruguay’s IRPF, the personal income tax, now reaches most foreign-source capital income that had long sat outside the tax base.

Interest, dividends, rental income from real estate abroad, and capital gains from foreign assets are now generally covered. The standard rate is 12%. A country once marketed for a relatively simple territorial system has moved closer to taxing offshore investment returns held by its own tax residents.

Another change reaches through foreign structures. Under the new tax transparency, or look-through, regime, income earned through non-resident entities may be attributed directly to a Uruguayan resident individual with at least 5% beneficial ownership. That matters for people who hold portfolios, companies, or investment vehicles outside Uruguay and assumed the entity itself kept the income beyond local tax.

Residency incentives also changed. New residents from January 1, 2026 may still access an 11-year exemption on foreign income, but entry requirements are tighter. The headline shift is the end of easy, low-presence routes that had helped attract foreign wealth with limited time on the ground.

Americans in Uruguay face a second layer of complexity. The United States taxes citizens and many residents on worldwide income, so the new Uruguayan levy may create double-tax exposure. In many cases, IRS Form 1116 may allow a Foreign Tax Credit for taxes paid to Uruguay, but the outcome depends on the income category and the taxpayer’s wider U.S. filing position.

Key facts in the new regime

DGI, Uruguay’s tax authority, is expected to enforce withholding and advance payment rules from July 2026. That start date turns a policy announcement into a cash-flow issue. People with foreign portfolios, offshore holding companies, or overseas rental income may need to account for tax before annual filing season arrives.

Eligibility for the incentive regime now rests on two main paths. One is a real estate investment of at least 12.5 million Indexed Units (~$2 million USD). The other is a capital contribution to productive activity of roughly $100,000 USD, combined with physical presence in Uruguay for more than 183 days.

⚠️ Starting July 2026, withholding and advance payments will be enforced for foreign-source income.

Who feels the change first

U.S. expatriates are the most exposed group. A Uruguayan resident with foreign dividends or gains may now owe 12% locally while remaining taxable in the United States on the same stream. There is no U.S.-Uruguay income tax treaty to soften that overlap. In many cases, the immediate task is less about rate shopping than clean reporting on both sides.

High-net-worth foreigners looking at residency face a narrower menu. The old image of tax residency through light presence has largely faded for new entrants. A person who wants the 11-year foreign-income exemption now generally needs either the roughly $2 million USD real estate threshold or a qualifying productive investment with more than 183 days in Uruguay.

Digital nomads and remote workers sit in a mixed position. Wages for services performed outside Uruguay generally remain outside local tax, even if the worker lives there part of the year. The result changes once the work is physically performed in Uruguay or the person holds foreign-source yields, such as dividends, interest, or offshore investment gains.

Ownership structures deserve close attention. A remote worker who bills clients abroad through a non-resident company may still find salary treatment different from investment income, but a separate offshore portfolio company with at least 5% beneficial ownership may trigger attribution under the look-through rules. Entity form alone no longer settles the question.

✅ If you are a U.S. expatriate or digital nomad in Uruguay, review your foreign-source income streams for potential 12% tax and assess FTC eligibility with IRS Form 1116.

Compliance timing and immigration records

June 10, 2026 is still early in the rollout, but the calendar is short. July 2026 is the date that turns planning into enforcement. DGI has also issued Resolution No. 665/2026 on suspension of advance payments, a reminder that administrative guidance may continue to refine collection mechanics even after the main decree took effect.

Americans with U.S. immigration filings may face a second documentation issue. USCIS does not administer foreign tax law, and no USCIS rule addresses Uruguay’s decree directly. Still, a June 9, 2026 USCIS policy alert described a higher documentation burden in discretionary filings, including tax compliance records. That may matter for green card holders abroad, adjustment applicants, or naturalization cases where filing history comes under review.

USCIS, led by USCIS Director Ur Jaddou, has increasingly asked applicants to support lawful presence, employment history, and compliance records with stronger paper trails. A person living in Uruguay while preserving ties to the United States may need to show consistent treatment of foreign income across local and U.S. filings. Gaps between the two systems can invite questions.

Where the official texts sit

Primary documents are spread across Uruguayan and U.S. government sites. Decree No. 95/026 appears through the Diario Oficial. DGI posts tax authority material, including Resolution No. 665/2026. The U.S. Embassy in Uruguay carries IRS guidance for expatriates, while the U.S. Department of State’s 2025 Investment Climate Statements for Uruguay are also available. USCIS policy alerts and manual updates are posted at [USCIS alerts](https://www.uscis.gov/newsroom/alerts).

Delta Air Lines and United Airlines continue to serve travelers moving between Uruguay and the United States, but flight access is the easy part. Tax residence, source of income, and filing consistency now carry more weight than entry convenience. Anyone seeking residency benefits after January 1, 2026, or facing withholding from July 2026, may want the decree text and filing records in hand before the next application season.

This article covers current tax and immigration policy developments and may affect residency or citizenship eligibility; consult qualified professionals for personalized advice.

Tax laws are subject to change; verify with official sources (Diario Oficial, DGI, USCIS) for the latest updates.