DOWNLOAD
- Basic Facts
- Statutory Labor Requirements
- Employee Income Tax In Brazil
- Employee Social Security In Brazil
- Immigration In Brazil
- Value Added Tax (VAT) In Brazil
- Withholding Tax In Brazil
- Terminating Employee In Brazil
- Statutory Employee Benefits In Brazil
- Payroll In Brazil
- Ease Of Doing Business In Brazil
- Business Opportunities In Brazil Section
- Why Use Global Expansion To Hire Your Employees In Brazil
SHARE ON SOCIAL
BASIC COUNTRY FACTS
The Oriental Republic of Uruguay
Montevideo
- Spanish
- Portuñol
- English
3.449 million
Peso Uruguayo
.uy
+598
Peso Uruguayo
STATUTORY LABOR REQUIREMENTS
Probation Period
- No statutory regulation in Uruguay.
- Common practice is to stipulate a 3 months’ trial period as a clause of the employment agreement.
- The jurisprudence has accepted the validity of this clause.
Annual Leave
- In their first year of employment, employees are not entitled to paid holidays.
- After that, every employee in Uruguay receives a minimum of 20 days of paid vacation each year.
- After five years of work with the same employer, the employee is entitled to an additional paid vacation day for every four years worked.
Public Holidays
- New Year's Day (1st January)
- Epiphany (6th January)
- Shrove Tuesday (25th February)
- Maundy Thursday (9th April)
- Good Friday (10th April)
- Labor Day (1st May)
- Battle of Las Piedras Day (18th May)
- Constitution Day (18th July)
- Independence Day (of Uruguay) (25th August)
- Columbus Day (12th October)
- All Souls Day (2nd November)
- Christmas Day (25th December)
Maternity Leave
- Since 1 June 2017 civil servants of the Central Administration are entitled to 14 weeks of Maternity leave (as well as private sector workers); and mothers or fathers can make use of a reduction in working hours, with a minimum of four hours a day, when the baby is between six and 12 months old.
Paternity Leave
- Fathers can make use of a reduction in working hours, with a minimum of four hours a day, when the baby is between six and 12 months old.
Sick Leave
- Employers do not have to provide sick leave, so instead, employees can get paid sick time through the Institute of Social Security (BPS).
Overtime
- Overtime work is generally compensated at twice the normal wage, and work on public holidays is paid at 2.5 times the regular compensation.
Notice Period
- Employers must provide one day’s written notice.
- There is no regulation on notice of resignation.
Severance
- Employees are entitled to severance payments which includes one month’s salary for every year employed up to 6 months of salary.
13th Month Salary in Brazil
- Yes (Mandatory)
- There is a statutory requirement to pay the 13th month salary.
- Which it is paid in two instalments named as supplementary annual salary, one in June and one in December.
INCOME TAX
- Under the personal income tax law, effective from 1 July 2007, individuals are subject to income tax in Uruguay.
- Resident individuals are subject to tax on their Uruguayan-source income.
- They are also subject to tax on certain foreign-source income, such as capital gains and work income, if certain conditions are met.
- Income subject to the tax is divided into the categories of capital gains (Category I) and labor income (Category II).
- The basic rate of personal income tax on capital gains is 12%.
- Tax on labor income applies to income derived from dependent or independent work.
- The tax is imposed at progressive rates ranging from 10% to 36%.
- Nonresident individuals are subject to income tax on their Uruguayan-source income at a rate of 12%.
- They are also subject to tax on their income from technical services performed abroad if certain conditions are met.
|
Income Tax Rate for Labor Income |
||
|
Annual taxable gross income (UYU) |
Tax rate (%) |
|
|
Over |
Up To |
|
|
0 |
348,936 |
0 |
|
348,936 |
498,480 |
10 |
|
498,480 |
747,720 |
15 |
|
747,720 |
1,495,440 |
24 |
|
1,495,440 |
2,492,400 |
25 |
|
2,492,400 |
3,738,600 |
27 |
|
3,738,600 |
5,732,520 |
31 |
|
5,732,520 |
36 |
|
IMMIGRATION
- To work in Uruguay, an employee must have a Uruguayan permit.
- Although Uruguayan regulations do not provide a “work permit” as such, a foreign national may work in Uruguay under a permanent residence visa, or under one of the temporary visas, for a period lasting the length of the employment contract.
- If the period is less than 180 days, a provisional identity sheet of the identity card should be requested.
- An applicant may work in Uruguay while his or her work permit application and other papers are being processed.
- No limitations are imposed on foreign nationals wishing to start businesses or head subsidiaries in Uruguay
- Temporary visas are available to the following temporary resident individuals:
-
- Migrant workers
- Scientists, researchers and academics
- Professional, technical and skilled personnel
- Students, trainees and interns
- Businesspersons, entrepreneurs, directors, managers and consultants
- Journalists
- Sports persons
- Artists
- Religious individuals
- Temporary visas are available to the following nonresident individuals:
-
- Tourists (foreigners entering the country for recreation, leisure or rest)
- Individuals invited by public or private entities because of their profession or art
- Businesspersons
- Members of public, artistic or cultural performances
- Members of international transport crews
- Passengers in transit
- Individuals in local border traffic
- Members of crews of fishing vessels
- Members of crews performing transshipments in the country
- Individuals who come for medical treatment
- Athletes
- Journalists and other professionals in the media
- All persons not included in the preceding items who are expressly authorized by the National Directorate of Immigration
- Permanent visas are issued to foreign nationals who intend to establish permanent residence in Uruguay.
- To obtain a permanent visa, an application must be filed either in the foreign national’s home country or in Uruguay, accompanied by the following documents:
-
- Passport or equivalent document
- Health certificate
- Proof of financial means
- Criminal records
- Identity card or document
- Birth certificate
- Uruguayan address certificate
|
Type of Visa/ Permit |
Documentation |
Validity |
Eligibility |
|
Temporary Visa |
|
6 months to 1 year (can be extended) |
A foreign national may work in Uruguay under a permanent residence visa, or under one of the temporary visas, for a period lasting the length of the employment contract. |
|
Permanent Residence Visa |
|
Indefinitely |
|
VALUE ADDED TAX
- The Uruguayan value-added tax (VAT) is based on the value-added method.
- All business undertakings that are income taxpayers are defined as VAT payers.
- VAT also applies to self-employed individuals and legal entities in general (including foreign ones) rendering personal services in Uruguay.
- VAT standard rate is currently 22 percent.
- A reduced rate of 10 percent applies to certain goods and services such as basic food items, medicines and services rendered by hotels.
- Goods subject to higher rates are: alcoholic beverages, tobacco, gasoline, fuel, lubricants and other petroleum products.
- The maximum rates are 80 percent for alcoholic beverages and 70 percent for tobacco.
|
VAT |
|
|
Luxury Rate |
80% (Alcohol) 70% (Tobacco) |
|
Standard Rate |
22% |
|
Reduced Rate |
10% |
WITHHOLDING TAX
Dividends
- Dividends paid to a nonresident are subject to a 7% withholding tax, unless the rate is reduced under a tax treaty
Interest
- The withholding tax on interest paid to a nonresident is 7% or 12%, depending on the term and currency of the loan, unless the rate is reduced under a tax treaty
- The rate is increased to 25% if the payment is made to a resident of a tax haven
Royalties
- The withholding tax on royalties paid to a nonresident is 12%, unless the rate is reduced under a tax treaty. The rate is increased to 25% if the payment is made to a resident of a tax haven
Technical Service Fess
- A 12% withholding tax is levied on payments made for services provided in Uruguay by nonresidents and technical services (including advertising service) provided from abroad to corporate income taxpayers in Uruguay
|
WHT |
|
|
Dividends |
7% |
|
Interest |
7% or 12%; 25% (if payment is made to a resident of a tax haven) |
|
Royalties |
12%; 25% (if the payment is made to a resident of a tax haven) |
|
Technical Service Fees |
12% |
TERMINATION
- In case a just cause for termination arises, such as a material breach of the contract, the agreement can be terminated without prior notice or indemnification, subject to a conclusive evidence of the just cause.
- On the other hand, termination is considered abusive and subject to indemnification when one or some of the following circumstances occur:
-
- absence of a just cause
- notification of termination is not given on time; and /or
- termination is done in bad faith.
- Employers must provide one day’s written notice.
- There is no regulation on notice of resignation.
- Employees are entitled to severance payments which includes one month’s salary for every year employed up to 6 months of salary.
STATUTORY BENEFITS
- These are mandatory benefits as postulated by law
- These include annual leave, public holidays, maternity leave, paternity leave, sick leave, overtime pay, notice period, severance pay, 13th month pay
- Statutory benefits also include social security benefits
|
Statutory benefits |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Paternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
13th month Pay |
|
Social Security Contributions |
PAYMENTS AND INVOICING
- Married persons have the option to be taxed jointly or separately for purposes of the personal income tax Category II and the net worth tax.
- The tax year ends on 31st December
- The taxpayer has to register at the tax office, following the procedures and formalities established by law and regulations.
- Non-resident individuals are subject to non-resident income tax on their Uruguayan-sourced income.
- In most cases, this tax applies through local withholdings; otherwise the non-resident will have to file their own tax return (personally or by means of an appointed representative).
EASE OF DOING BUSINESS
- The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
- Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
- According to the World Bank Uruguay ranked 101st in the World in 2019 in terms of ease of doing business.
