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Tax Law Changes in Uruguay, Practical IssuesThis forum post has messages dated from 01/09/11 through 05/16/11, please be sure to read all the messages. If you feel it is old or outdated, please follow up with a question or comment and someone may be able to update it, or reply with newer information if you have it.
| Tax Law Changes in Uruguay, Practical Issues Let's use this topic to discuss the new tax law changes in Uruguay at a practical level, ie: what it means to expats, what obligations it imposes on expats (both financially and paperwork wise). Do you need to hire an accountant in Uruguay? Do you need to get financial documents from the USA (or your country) legalized? ie: does a 1099 you get from your bank suffice for reporting interest income in Uruguay?If you get a credit in Uruguay for taxes paid in the USA do you have to file a return in Uruguay? Would it be better to pay taxes in Uruguay (you are living here) and get a credit for them in the USA? Let's leave the political debate to the other post. That means if you post about why it is good or bad, or something of that nature here it will simply be deleted. Expert Page: Quick Tips for Getting Settled in Uruguay |
Comment #101/09/11 10:59Rural east Colonia departmento | "Still enquiring"
I've asked my local gestores to look into it for me but they reckon that although the law has been passed, we still lack a decree which sets out the fine details. |
| "For Reference"
For reference, here is a summary of the new tax legislation (in Spanish), with a link to the full text. Patrick is right though; the nitty-gritty will come with the decree. |
| "More questions than answers"
Lots of good questions Glen. I have a few more:1. How does this work with US retirement accounts (IRAs) where the "income" from dividends, interest and capital gains isn't even officially reported? 2. How are US-taxable withdrawals from those accounts handled? 3. When you are a US resident, the order is to calculate your "non-resident" income first, pay the taxes on that and then take a credit (where available) when paying your taxes to your state of residence. So - assuming I have income taxable in Uruguay, do I calculate and pay the US first and then take the credit against Uruguayan taxes? 4. What ever happened with the "wealth tax"? I'll be watching this topic very closely. Thanks! Gaye |
Comment #402/08/11 09:32Rural east Colonia departmento | "Wealth tax."
"4. What ever happened with the "wealth tax"?"I'm not up to speed on the US tax system so 1, 2 and 3 are "don't know." As for 4... initially the IP (wealth tax) was going to be charged on all assets world-wide but Lorenzo did one of his "tweaks" and excluded non-Uru citizens from liability on overseas capital assets. IP is still applicable to assets held within the ROU. There is an annual tax free allowance of about 100k U$S per person (twice that for a married couple) with a sliding scale of tax up to a maximum of just over 2%. The tax is due to be "tapered out" and should cease altogether by 2017. Certain items like farmland, necessary farm machinery and surprisingly cash are also excluded. |
Comment #602/09/11 11:33Rural east Colonia departmento | "Agreed"
We still await the administrative decree which will (hopefully) clarify the issues. I suppose everybody concerned with preparing and publishing it is still on holiday :-) |
Comment #704/13/11 00:13Rural east Colonia departmento | "Juan Fischer's web site"
Its now mid April and I'm still waiting to see the administrative decree concerning the details of the proposed new IRPF (income tax) on foreigners' foreign income.The other day I was checking Juan Fischer's web site (he seems to be well in with the current government) and was amazed to read that the minister has decided to shelve the proposals until 2015. I returned to the site today only to find that Dr Fischer's words are gone! My broker tells me that he heard that the minister said something along those lines but as seems usual, nothing has appeared in writing so our liabilities or lack of liabilities remain unknown. I really do wish that the government would make its mind up. Tax planning is hard enough anyway but its impossible when you don't know whether or not there will be taxes to pay (or not) :-) |
| "Tax Update from the Sovereign Society"
I saw the blog post linked below, by Bob Bauman of the Sovereign Society, but it is just based on the same information from Dr Fischer. As of a few days ago, I didn't find anything on Dr Fischer's site, nor was I able to find any new decretos passed on the subject. Didn't realize the info had come and gone on Dr Fischer's site! |
Comment #904/13/11 22:46Rural east Colonia departmento | "Dr Fischer's info"
He seems to be a very optimistic sort of person when it comes to attracting new immigrants to the ROU :-) |
| "'good news'"
Delaying implementation of something until 2015 (or whenever) is hardly good news. It will simple extend the period of time for which many will cross Uruguay off their expat consider list.Additionally, the unknown requirements, obligation and process will continue to confuse and frustrate those already living or in the process of moving to Uruguay. I think it would also delay anyone planning serious investments for at least 4 years because it would be silly to invest someplace when significant, but known tax changes are on the horizon. Of course that would happen any place, but Uruguay seems to be saying, it WILL HAPPEN IN 4 YEARS (maybe), but we're not going to tell you what! So with that kind of political confusion, yes, I would say, Mr. Fischer needs to be a very optimistic sort of person! Expert Page: Quick Tips for Getting Settled in Uruguay |
Comment #1104/14/11 08:56Rural east Colonia departmento | "Yes indeed."
Its wise to remember that Dr Fischer is a paid consultant to the government here and that he has issued some over-optimistic information in the past so it pays to take his advice with a large portion of salt :-)Mind you, I'd be delighted if his words were true. |
| "Announcement by Lorenzo in El País"
Here is the announcement from Lorenzo, as quoted in the April 7 El País"Tanto los extranjeros que vengan a residir al país como los que ya cuentan con esa categoría tendrán una 'ventana' de cinco años para tributar por el Impuesto a la Renta de No Residentes lo que les permitirá eludir el gravamen impuesto a las rentas de capital en el exterior. El anuncio lo hizo ayer el ministro de Economía, Fernando Lorenzo." (in the last section of the linked article) |
Comment #1304/15/11 18:37Rural east Colonia departmento | "Yes its there..."
... but its meaning isn't clear to me.It refers to a first 5 year "window" of forgiveness on IRPF for foreigners who decide to move here but makes no mention of foreigners who are here already. There again, we have had many nebulous pronouncements which have then been changed so I suppose its just a matter of waiting for the once and future administrative decree... and then waiting some more for the changes to it :-) |
| "English translation of tax article"
I will be seeing my lawyer with Posados and Posados later today (if there isn't a bus and taxi strike as predicted) but meanwhile here is the link for the English translation of Shirley's article link. |
| "Soy curioso. (is that grammatically correct?)"
I/we haven't yet embarked upon the emmigration to Uruguay, yet. However, it seems to be the ideal place to me. I'm a veteran, have an M.S. in Ed., sufficient disability income, etcetera, so it looks good for approval. In the US, the only taxable income I have is from Federal disability retirement, the other sources being veterans' comp & SSD. This "taxable" amount is not, then, the same amount the gobiermento de Uruguay would count as income, then? Also, does being physically disabled, a retiree/pensionado, and 61 years old, afford me any breaks? Gracias a' todos! |
Comment #1605/16/11 12:24Rural east Colonia departmento | "We're still waiting"
Lorenzo made his first announcement over taxing foreign income a year ago. The law was passed at the end of December but the details in the form of an administrative decree have yet to be announced.Dr Juan Fischer, a well known immigration lawyer who seems to be well connected with the government has been saying that any plans to tax foreigners' foreign income will be delayed until 2015 and/or possibly scrapped altogether but we've had so many contradictory statements and rumours that I'm staying calm about the matter until the gov eventually publishes its decree. According to Dr Fischer, its due to appear this month. According to my "Colonooligan" rural neighbours its just another bit of Montevidean socialism which is best ignored :-) |
| "Confusion is the Enemy of Progress"
What ever they are going to do, they need to figure it out and make it clear. I can't imagine anyone making plans to move to a place which had made it clear there MIGHT BE some UNKNOWN tax obligations NOW or at some unknown time in the future!Of course that could be the case in anyplace. But Uruguay passed a law making some changes and then seems to have never implemented it. So it just adds confusion on top of confusion. Expert Page: Quick Tips for Getting Settled in Uruguay |
| "There're taxes, death, & trouble everywhere you go, no?"
So true, Glen. The City of Bellingham and the State of Washington keep jacking up our taxes; apparently, the voters are virtually impotent to stop a fiat from the city council or the legislature. We are house poor, now. If it wasn't for our longtime friend renting out our basement apartment, we'd be hard pressed to eat and pay the mortgage, pay off the credit cards, and pay utilities. We have a great Pan Abode cedar log home on a creek with .62 acres, plus a cabin, but after the "bubble" popped, we'd have to get at least $400+K, and that market is very slow. Seldom do we go out, and that's for fish & chips lunch, not a restaurant. Gas is around $4./gal. Cheapo milk is $2.40/gal. I have to go to the Swinomish Reservation to buy pipe tobacco in bulk and make my own smokes on a little plastic tube injector. Even with surly service, broken sidewalks, and blithering incompetence and red tape, Uruguay just doesn't look that bad, all in all. What are your impressions? |
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