Uruguay regulates credit-linked tax on nonresident dividends

The decree implements Article 657 of Law No.20,446 by amending Articles 6, 7, 22, 23 and 34 of Decree No.149/007. The underlying statutory exception concerns the entities listed in Article 12(A)(1–8) of Title 4 of the 2023 consolidated tax legislation, not every payment made from Uruguay. The statutory dividend exemption and its exceptions must be considered together.^[1][7][8]

The ordinary branch remains tied to dividends or profits originating in income subject to IRAE. The additional branch covers distributions made from 1 January 2026 to the extent they exceed that branch, irrespective of the underlying income’s tax treatment. It requires taxation in the beneficiary’s residence jurisdiction and a credit there for Uruguayan tax. It does not apply where a fiscal loss prevents use of that credit. Combined Uruguayan tax under both branches cannot exceed the corresponding foreign credit.^[2]

Article 22(B) specifies 7% for covered dividends and profits. This is not a blanket charge on every cross-border distribution: the charging scope, exemptions and credit limitation remain necessary. For the ordinary IRAE branch, Article 7 limits the charge by fiscal net income and the shareholder’s relevant proportion; prior-year fiscal losses are not included in that fiscal-net-income measure.^[3][4][5]

The revised withholding provision addresses foreign CFC-type imputation. Withholding under the additional branch is required despite earlier attribution where the residence jurisdiction grants credit. Tax withheld that cannot be credited wholly or partly is refundable once that is reliably demonstrated. DGI is to set implementation conditions and may simplify cases where dividends are untaxed abroad or no credit is available.^[6]

Groups should establish the payer’s legal category, distribution date and income history, the beneficiary’s residence-country taxation, usable credit and any fiscal loss. An assumed credit or country match is insufficient. The reviewed text supports conditional charge and evidence requirements but does not establish a new day-specific filing or payment deadline.^[2][6][7][8]