He World Bank (WB) published the Economic Report for Latin America and the Caribbeanwhich in its October edition focused particularly on the wealth taxes and its contribution to equity and growth; In that sense, it dedicated a section to the tax advantages it offers Uruguay and that are especially attractive to entrepreneurs and Argentine businessmen.
That Uruguay It is chosen by many Argentine businessmen, of different levels of success, career and economic background – the best known examples are those of Marcos Galperín, CEO of Free market, and Martin Migoya, CEO of Globant, But there are many citizens of the neighboring country who choose to work from Uruguayan lands—it is no longer a novelty. However, the B.M. He dedicated a specific space to it in his report, pointing out to the “tax issues” as a key factor for this phenomenon.
“Tax issues had an important influence on the decision of several notable businessmen to move from Argentina to Uruguay”, the report stated, adding that “a comparative analysis of the tax regimes of both countries provides a clearer picture of the incentives behind this decision.”
In this regard, the document explains that Argentina apply a progressive income tax and income generated within the country to both residents and non-residents, whose rates can reach up to 35%. On this, furthermore, it establishes a wealth tax“which represents a significant burden for high-net-worth individuals.”
“The country’s complex tax system often changes the legislation on the matter, while the economic instability generates an uncertain environment for taxpayers,” adds the WB.
On the other hand, Uruguay offers “a friendly tax environment” which positioned the country strongly among businessmen and investors precisely because of that characteristic and, particularly, among high-net-worth individuals.
What are the main tax incentives that Uruguay offers to Argentines?
He World Bank pointed out five main characteristics by which Argentine businessmen choose to change their legal residence to Uruguay.
The first of them is the territorial taxation, which primarily taxes income generated within the country’s borders, so income from foreign sources, in general, is exempt from taxation.
In addition, non-residents are subject to a fixed rate of income on income 12% on income generated within borders; a rate much lower than the progressive rates of Argentina.
On the other hand, the B.M. he pointed out corporate income taxwhose rate in Uruguay It is 25%, a competitive figure compared to other countries in the region; and also highlighted the tax treaties that contribute to avoiding double taxation and facilitate cross-border investments.
Finally, the financial secret It is another of the incentives that lead so many Argentine businessmen to cross the Silver River and settle in Uruguayan territory: “although Uruguay advanced in terms of tax transparency, “continues to offer some degree of financial secrecy that attracts some high-net-worth individuals,” the segment of the report concluded.
Source: Ambito
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