The 31 December 2026 Tax Holiday deadline for existing residents

By Cr. Matías Zurbriggen, public accountant (CCEAU 225636).

Became a Uruguayan tax resident before 2026 without making the election under the earlier Tax Holiday regime (article 24 of Title 7)? Uruguay’s tax authority (DGI), in Resolution 2,158/026, sets 31 December 2026 as the last day to exercise it. Whether you are eligible, and whether it suits your income, is what we review, in a confidential written report in English.

Who this deadline is for

For people who acquired Uruguayan tax residence before 1 January 2026 and never exercised the article 24 option. Residence is assessed by calendar year (article 2 of Title 7), not by permit or identity card. Typical situations, not client cases:

• You moved in 2024 or 2025, spend most of the year here and receive dividends or interest from companies or banks abroad. Nobody mentioned an election. If that income comes from the UK, see also how Uruguay treats UK pensions and dividends.
• Your spouse (not legally separated) and dependent minor children live here while you travel for long periods. The rules presume your residence in Uruguay, subject to proof to the contrary, so its starting year needs checking first.
• You became resident some years ago and are not sure whether an election was ever filed for you. The first point is to confirm what is on record with DGI.

What the earlier regime is, in brief

Article 24 of Title 7 lets a person who acquires Uruguayan tax residence choose, once, how certain foreign income is taxed: only the income in article 6(2) of Title 7, that is, certain returns on capital from non-resident entities, with exclusions, and from 2026 certain gains on those assets. Salary or fees for work done from Uruguay are not covered; that income is generally Uruguayan-source.

For people who acquired tax residence between 2020 and 2025, the alternatives under the earlier regime are the non-residents' income tax (IRNR) for the year of the change and the following ten tax years, or personal income tax (IRPF) at the rate in article 37 of Title 7. IRNR reaches only Uruguayan-source income (article 6 of Title 8).

The initial IRNR period runs from the year you became resident: exercising the option in 2026 does not restart it or change the requirements. For residence in general and the regime for new residents, see our guide to Uruguayan tax residency and the Tax Holiday.

What to decide before 31 December 2026

A set of questions about your case, not a form. Our analysis answers them:

• Do you belong to the earlier regime? It depends on the year in which you became a Uruguayan tax resident and on how that can be evidenced.
• Which years can an election made now still cover? The window runs from the year of the change, so part of it may already have passed.
• Does it suit your income? It depends on what you receive from abroad, how much, and whether foreign tax on the same income could be credited under the general rules (article 25 of Title 7).
• IRNR or IRPF? The two alternatives work differently, and the option is made only once: DGI states that, once exercised, it cannot be changed.
• What comes afterwards? People who used the earlier regime may have later options, including some in article 24-Bis, each with its own conditions.

For a tax resident who makes no election, the general IRPF rules for each type of income continue to apply.

Who the deadline does not apply to

• New residents from 1 January 2026. They fall under article 24-Bis (added by article 648 of Law 20,446), with its own conditions, including not having applied article 24, subject to the exceptions in the rule. The extended deadline does not let them choose freely between the two regimes.
• People who already exercised the article 24 option. It is made once. What may need a review is its scope from 2026 (see the questions below).

Why the law says 2025 and DGI says 2026

Article 649 of Law 20,446 rewrote the first paragraph of article 24: the option may be made once only and until 31 December 2025. Decree 188/026 (article 1) kept that date in article 5-Quater of Decree 148/007 and authorised DGI to set the terms and conditions for exercising it.

Using that power, with the agreement of the Ministry of Economy and Finance, DGI Resolution 2,158/026 (number 7, published on 17 September 2026) provided that the option may be exercised, not just documented, until 31 December 2026. In practice, that is the operative date before DGI: an eligible person who exercises the option within 2026 relies on a general DGI resolution that expressly allows it.

A residual risk remains: if the date in the law were read as a substantive limit, a power granted by decree might not be enough to extend it. We have not identified case law on the point, and we do not regard the resolution as void. Where the amounts involved are significant, it can be worth asking DGI for a formal position on the specific case.

What to do now

Ask for an analysis before the end of the year: we check your residence history, the income involved and whether the election is worth exercising. The earlier your documents arrive, the more room there is before 31 December.

You write in English and receive a confidential written report in English, prepared by one of our accountants. We work mainly in writing; calls are also possible. An accountant, not an assistant, replies within the working day.

Estudio Zurbriggen has operated since 1993. Its two public accountants, Cr. Fernando Zurbriggen and Cr. Matías Zurbriggen, are registered with the CCEAU under numbers 61148 and 225636.

Get a written analysis in English

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