Uruguay Expat Forum

Expat Taxes

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veritas238

12/28/2016 23:13 EST

I see that Uruguay has the benefit of 5 years no income tax requirement for new residents into the country.

If i relocated to Uruguay for 5 years, worked remotely for my US company and earned US dollars into my US bank account.... does anyone know how the Foreign Earned Income Credit would work in this scenario? Its generally to avoid double taxation, but if the host country (Uruguay) is saying I normally would have tax, but for a period of time I don't, would I be able to not pay US income tax by claiming this exclusion... or am is it just wishful thinking in trying to avoid paying ANY income tax for five years?

Thanks!

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focus

12/29/2016 09:47 EST

I believe the non-taxable income you are referring to only applies to foreign dividend and interest income received in Uruguay when you change your fiscal residency to Uruguay. First, I highly doubt that would exempt you from paying taxes in the US on money earned from US operations. Second, foreign sourced earned income is exempt from taxes in Uruguay anyway. Third, this is just my best guess and your question should really be directed at a professional in this field. Maybe you could get Mark Teuten or Juan Fischer to answer your question for free (www.teutenabogados.com, www.fs.com.uy).

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Vortice

1/1/2017 05:34 EST

As long as you retain US citizenship, you must pay the IRS on every penny you make regardless of where on the planet you make or spend that penny. You must report all foreign bank accounts to them as well or face $10k plus penalties. Renouncing your citizenship is the only way around this and the application for this costs over $400! I have no interest in renouncing my US citizenship, but it chaps my hide that the IRS will tax me on the money I earn, and spend abroad.

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