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Does anyone know about resident income taxation ?This forum post is dated 11/03/11. If you feel it is old or outdated, please follow up with a question or comment and someone may be able to update it, or reply with newer information if you have it.
| Does anyone know about resident income taxation ? Hello, helloI am considering re-locating to URUGUAY, and have been researching the income tax implications. I understand that offshore income on financial instruments like bonds or capital gains on equity investments are subject to a 12% tax, even if the gains/income is earned outside of Uruguay, and isnt even brought into the country. Is this correct ? And I was horrified to see that the government charges a 2% 'wealth tax ' ???!!! So, if my net worth is, for example, $1Million I have to pay these guys $20, 000 ? Is this correct ? Also, AM I missing something ? If I have all my assets in offshore jurisdictions, are there any other obligations that I have to the tax department ? Thanks a whole bunch ! |
| "Tax Advice"
If your intentions are to pay less in taxes, than in Uruguay you will succeed. I don’t think this forum is the place to get solid advice on tax laws, but perhaps someone can direct you.As you surely must know, taxes are collected to pay the collective costs of our society. Fortunately things are not as far off course as in the US, but we must all work to make a world that is just and that means paying your fair share. This concept is started to catch fire all over the world. I hope I find support from participants here when I say tax avoiders, cheats and protectors of the current class system (protected by current tax laws in most places) would not be a good fit here. Why don’t you go live off shore with your money? This is a beautiful, safe and mostly democratic place because of our participation, which includes the taxes. Yes, plenty of reform is needed here too, but if you are thinking of coming to enjoy it, maybe think more about how you can contribute and less about protecting your wealth. These guys indeed! Signed, Happy without You |
| "Two options"
There are two financial options for Uruguay with respect to Expats:- They come and spend money in Uruguay - They don't come and spend money else where. I believe George wants to be in the first category, but is concerned about taxes on his affairs from outside Uruguay, if he choses do that. Because of the MASS CONFUSION over this issue, and NO ONE having clear answers, many people have shifted from the first to the second category. That leaves Uruguay on the wrong end of things economically. And, remember, everyone who fits into the first category, not only brings "free" money into the economy of Uruguay (simply because they want to live there), they also pay plenty of taxes, 22% IVA on all purchases, 60% or so on all import products. But Uruguay wants to on top of that tax things are are unconnected to the country, ie: why should Uruguay be entitled to taxes on the preview 60 years of savings of someone who just moves to Uruguay? But all of that aside, the questions George brings up are very difficult to get any clear answers. New tax laws were passed, but not implemented. How can someone plan, or make an informed decision without knowing, what is (or will be taxed), how much, and what paperwork and documentation is required. Additionally, since the tax laws were passed in 2007, prices have gone through the roof for housing and food. A coincidence or not? Expert Page: Quick Tips for Getting Settled in Uruguay |
Comment #311/03/11 10:26Rural east Colonia departmento | "Income tax on foreigners' foreign income"
A year ago last May, Snr Lorenzo (our Min of Finance) made some radical tax proposals wrt the taxation of foreign income and foreign capital for Uru citizens and for foreigners resident in the ROU for more than 182 days a year. This resulted in a flight of ex-pat mega-wealthies and over the months his proposals were gradually watered down. The new tax laws were passed by the legislature in late December last year. Broadly speaking, foreigners who are resident here were excluded from capital taxation on their overseas assets but were made liable for a 12% income tax on certain types of foreign income. Fortunately, rental income and foreign pensions were excluded which eased my mind considerably. Subsequent statements from Lorenzo indicated that of the taxable income types, no taxes would be levied on income which had already been taxed at 12% or more by foreign governments. In the press statement he issued in May he suggested that (a) foreigners' foreign incomes might not be taxed at all (b) they might not be taxed until 2015 and (c) that he would be issuing an administrative decree "soon" to provide details and put the tax law into effect. Silence has reigned ever since but I suppose the term "soon" is a relative one. He might have been thinking in geomorphological terms :-) So, to sum up, only Lorenzo knows if we are to be taxed, when (if at all) we are to be taxed, upon what basis we are to be taxed, whether foreign tax free allowances will be recognised by the DGI if he does decide to tax us etc etc. As for taxation of investment income derived within the ROU... its taxable unless you invest your dosh in government bonds which pay the interest income tax free. Residents are liable to a wealth tax (IP) but there is a free allowance of about 100k U$S/person, official house valuations seem to undervalue and all farming assets are exempt as are cash and bank deposits. Having lived most of my working life in Ireland, the UK and Thailand where income and capital taxes are strictly enforced, I became very anxious about what Lorenzo is/isn't doing but my friends and neighbours here in rural Colonia pointed out that the local view on taxes was that they are just there to vex the citizens of MVD and that us Colonienses have a long history of ignoring them. A good friend of mine runs a successful business very close to the DGI (tax) offices in a local town. She advertises on the radio regularly and has several DGI officials as customers but has yet to receive an income tax demand :-) I suspect its all just aspects of the Uruguayo way :-) |
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