Under the territorial taxsystem, residence is not a decisive factor. A non-resident with a permanent establishment (PE) in Uruguay will be assessed to tax, much a like a resident company, on income arising in or deemed to be derived from sources in Uruguay. A branch profit remittance tax at the rate of 7% is applicable on after-tax income remitted or credited to the foreign head office. Non-residents without a PE in Uruguay are taxed by way of withholding on certain items of income deemed to be from Uruguayan sources. In that case, the withholding is generally operated on the gross amount.