IRPF: how is the salary tax in Uruguay compared to countries in the region

A few days ago, Uruguay made changes to the personal income tax regime with the aim of transferring more benefits to taxpayers. The countries of the region have current tax regimes on wages or remuneration, based on different forms and calculations. All have in common a floor of non-taxable minimums. Taking this reference as a base, a comparison between the income tax of Uruguay and some nearby countries is developed below.

The government announced on March 2 modifications to the regime of Personal Income Tax (IRPF) expanding the possibility of applying deductions. With this variation he chose the path of not playing the non-taxable minimum leaving it at $39,620 per month, equivalent to US$1,011.

According to official estimates, the announced modifications will reach 327,000 people, 75% of personal income tax payers. In addition, 63,000 people who receive less than $60,500 per month will no longer be IRPF taxpayers with the changes to the deductions, which include allowances for dependent minor children, mortgage loans or rent payments, among others.

Apart from that, the nominal bands to apply the tax were maintained. The values are calculated taking as reference the Benefit and Contribution Base (BPC). The first range goes from $39,621 to $56,600 (from 7 to 10 BPC) with a 10% tax. The tax is progressive up to 36%, which applies to salaries of $650,901 and up (more than 115 BPC).

Argentina

In Argentina the Income Tax. As of January 1 of this year, the minimum non-taxable amount of the tax is A$ 404,062 (US$ 1,086 at the blue dollar exchange rate). From that amount and after applying a series of available deductions, payments begin to be made progressively.

IRPF: how is the salary tax in Uruguay compared to countries in the region

LUIS ROBAYO / AFP

Argentine pesos

The first range goes from A$0 to A$173,834.61. In this case, 5% is paid on the excess of A$ 0. If the amount is between A$ 173,834.61 and A$ 347,669.23, a fixed amount of A$ 8,691.73 is paid plus 9% on the excess of A$173,834.61. This continues progressively with the corresponding fixed amount on net profit and a percentage of 35%.

Some deductions are from allowances for children, rents, Deductions range from allowances for children, rents, mortgage loans and educational expenses, among others.

Brazil

In Brazil wage tax is called Meat-Leão. The minimum non-taxable amount is 1,903.98 reais (US$365). From that value up to 2,826.65 (US$ 542) 7.5% is paid. For subsequent bands the tax is progressive with percentages of 15%, 22.5% and 27.5%.

The government plans to raise the minimum non-taxable amount to 2,640 reais (US$507) this year.

Alimony, income from real estate rental, mortgage installments and real estate expenses, among others, can be deducted for the payment of Carne-Leão.

Chili

In Chili the Single Second Category Tax on Wages and Salaries. The monthly salary of up to 843,075 Chilean pesos (equivalent to US$1,054) is exempt from the tax. Based on this value and applying a formula, a progressive tax table is established that goes from 2.2% to more than 27.48%. In the following link you can see the different strips: https://www.sii.cl/valores_y_fechas/impuesto_2da_categoria/impuesto2023.htm

Paraguayan

In Paraguayan the Personal Income Tax (IRP). The minimum non-taxable amount for 2023 is 219,775,104 guaraníes per year (equivalent to US$30,535).

From that amount, 8% is paid for IRP. From 274,718,880 guaraníes the amount of the tax goes to 10%. Family expenses for education, health, housing and purchase of real estate can be deducted.