Uruguay

In Uruguay, cryptocurrencies are officially recognized as "virtual assets" under a new law passed in October 2024 and are classified as "intangible assets" by the tax authority. The country's cryptocurrency market is now regulated, with the Central Bank granted authority over Virtual Asset Service Providers (VASPs), requiring them to obtain licenses. The Dirección General Impositiva (DGI), Uruguay's tax authority, governs cryptocurrency taxation, primarily under the existing Income Tax Law. For individual residents, gains and income from cryptocurrencies are subject to progressive income tax rates ranging from 0% to 36%, based on their total annual income. Non-residents face rates of 7% to 25%, or a flat 25% if domiciled in low or zero-tax jurisdictions. Both converting cryptocurrency to fiat currency and swapping one cryptocurrency for another are considered taxable events, with capital gains calculated as the difference between the proceeds received and the acquisition cost. Cryptocurrencies held for more than one year may qualify for a reduced capital gains tax rate, though the specific amount of this reduced rate is not publicly disclosed. Companies dealing in crypto are subject to a 25% corporate tax rate. While a draft proposal suggested that cryptocurrency transactions would be exempt from Value Added Tax (VAT), this has not been enacted, leaving the current VAT status uncertain, the general VAT rate is 22%. Specific cryptocurrency activities also have tax implications. Staking rewards are taxed as ordinary income upon receipt, subject to the individual's progressive income tax rates. Similarly, cryptocurrency mining is treated as business income, and mining rewards are subject to progressive income tax rates, with operating costs generally considered deductible. Activities within Decentralized Finance (DeFi) are not officially addressed but are likely taxed as income (e.g., yield farming) or capital gains (e.g., selling LP tokens) by analogy to existing rules. Non-Fungible Tokens (NFTs) are also not explicitly addressed but are likely treated as intangible assets, with gains on their sale subject to capital gains tax. As of October 2024, Uruguay passed a dedicated law regulating virtual assets, establishing the Central Bank's authority over VASPs and implementing licensing requirements. While this marks a significant step in regulation, a comprehensive framework for cryptocurrency tax provisions is still pending. A draft bill from October 2021 that included specific tax treatment, such as treating crypto like foreign currency, has not yet been enacted into law.