'pension taxes' Retirement  

pension taxes

Retirement in Belize
Retirement, Uruguay

fvansan from pennsylvania - Tue Aug 12 14:30:43 2008

I understand there was new legislation that went into effect regarding taxes. I wanting to find out how this new tax structure will impact on my American Social Security benefits. Obviously, taxes are an important decision when considering emigrating to another country. Thanking responders in advance.

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Comment #1 Wilbur Corncob from Punta del Este - Tue Aug 12 20:07:54 2008

Are you referring to the taxes that went into effect July 1, 2007 or something newer?

Those taxes did not accept income earned/received outside the borders of Uruguay.

Comment #2 fvansan from pennsylvania - Wed Aug 13 16:23:33 2008

This is what I read. If this is accurate, I would be in the 20% tax range, which in addition to possible USA Income Tax for me would be difficult for my wife and I.

Do you know if this was approved? Frank

(See next post for quote)

Comment #3 fvansan from pennsylvania - Wed Aug 13 16:27:23 2008

Gov’t Cans Income Tax on Pensioners, Implements New Tax

UDN

(20-MAY-2008) Economy Minister Danilo Astori and Labor Minister Eduardo Bonomi will be questioned in Parliament today regarding the personal income tax (IRPF). Blanco party deputy Pablo Abdala called for the session, which will occur a few hours form the government’s announcement that it will annul IRPF on retirement income and create a new tax instead.

(continued next post)

Comment #4 fvansan from pennsylvania - Wed Aug 13 16:28:23 2008

The new tax, called the Social Security Assistance Tax, will have a non-taxable minimum of UYP 14, 200 monthly.

Pensioners receiving between UYP 14, 201 to 26, 625 will pay 10%. Those receiving between UYP 26, 626 and 88, 750 will pay 20% and those receiving more than UYP 88, 751 will pay 25%.

(continued next post)

Comment #5 fvansan from pennsylvania - Wed Aug 13 16:29:14 2008

According to Astori, 87% of retirees will not pay any taxes with the new system. (El Espectador.com, 20 May 2008)

(End of post)

Comment #6 Wilbur Corncob from Punta del Este - Fri Aug 15 06:51:30 2008

I asked Santiago about his and this is his reply...

--

think he's confussed. To align the actual law with certain judicial decisions (not all of them) declaring unconstitutional the income tax applied to pensioners (in the form it was written in the July 2007 reform), the administration decided to replace JUST FOR PENSIONERS the income tax with another tax (the so called "Social Security Assistance Tax") which is basically same tax, but it's been drafted in a different way to avoid judicial objections. The income segments have changed a bit (but for everybody some time later) and nothing else. Foreign income is not taxed, as since the beginning.

--

So they are just rewriting the law from July 2007 a bit and it will not tax foreign income.

So, if you live in Uruguay you need to report Uruguayan income to Uruguay and the US. For income from outside Uruguay you report that only to the US.

Comment #7 fvansan from pennsylvania - Fri Aug 15 08:27:43 2008

Ah ha, thanks for clearing that up! It's appreciated.

Comment #8 Walt Meinhart (206.195.193.254) - Mon Sep 8 12:45:23 2008

What is the tax treatment that a citizen of Uruguay who is currently working in the USA can expect when he returns to live in Uruguay with funnds accumulated in his US employer's pension plan and funds accumulated in his USA IRA plans and tax deferred annuities?

Comment #9 Wilbur Corncob from Punta del Este - Tue Sep 9 07:43:28 2008

I think at this time Uruguay's tax laws relate to where the income is earned, not the citizenship or residency of the person.

So anything done INSIDE Uruguay may be taxed (rents, interest earned, etc). I believe dividends are till not taxed. Anything done OUTSIDE Uruguay is not taxed (rents, interest, wages, etc).

Comment #10 Mike (24.46.201.93) - Sat Sep 20 09:29:01 2008

There is no tax on income derived from NON-URUGUAYAN sources. In other words, neither your American pension nor your social security income is subject to Uruguayan taxes. (But don't worry, President Obama will remedy that by doubling the U.S. taxes you already pay.)

Comment #11 Liam (63.176.159.89) - Sun Sep 28 08:40:51 2008

That is all very nice to hear.

Comment #12 Tommy (63.176.159.191) - Wed Nov 19 09:37:47 2008

This is all confusing me. Can you send me a link that can give me more info?

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