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Uruguay: New tax compliance guidance for digital economy

Uruguay's tax compliance guidance

Uruguay’s tax authority on 12 October 2018 introduced compliance and tax-payment rules (Resolution No. 9270/2018) relating to taxation of the digital economy.

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Background

Law 19.535 (effective 1 January 2018) introduced rules for the tax treatment of the digital economy and the taxation of foreign companies doing business in Uruguay through the internet, IT platforms, and software applications. Under Law 19.535, some exceptions to Uruguay’s territorial system were introduced—specifically, services related to businesses involved in the digital economy were identified as being subject to income tax and value added tax (VAT) in Uruguay even if the services were provided from a foreign jurisdiction.  

In May 2018, the tax authority issued a decree to implement the rules introduced by Law 19.535, thus affecting multinational corporations operating in the digital economy space or providing digital economy services in Uruguay. Read TaxNewsFlash

Resolution No. 9270/2018

The Uruguay tax authority in issuing Resolution No. 9270/2018 established compliance and payments rules under Law 19.535. For instance, the resolution provides the following procedural guidance: 

  • Currency—Nonresident taxpayers with operations subject to income tax and VAT as a result of the changes introduced by Law 19.535 can elect to pay these taxes in U.S. dollars provided that: (1) all their taxable transactions have been documented and denominated in U.S. dollars; and (2) these nonresident taxpayers do not have any other taxable activities in Uruguay or, if they do, these other taxable activities have already been subject to withholding tax.  
  • Income tax pre-payments and VAT returns—Nonresident taxpayers with operations subject to income tax and VAT under Law 19.535 must: (1) make income tax pre-payments every three months (instead of monthly); and (2) file annual VAT returns and remit VAT payments every three months.
  • Due dates—The resolution establishes that nonresident taxpayers must remit income tax pre-payments on or before 1 January 2019 for taxes for the period of October through December 2018 and must file VAT returns on or before 10 December 2018 for VAT for the period July through September 2018 period (the previous due date was October 2018). 
  • VAT invoice requirements—Nonresident taxpayers subject to VAT under Law 19.535 will not need to notify their customers that the services were subject to VAT if the invoice provided to the customers states that VAT was applicable.  

 

 

For more information, contact a tax professional with KPMG’s Latin America Markets practice or with the KPMG member firm in Uruguay: 

Alfonso A-Pallete | +1 (305) 913 2789 | apallete@kpmg.com 

Gustavo Melgendler | +598 290 245 46 | gmelgendler@kpmg.com 

Luis A. Aisenberg | +598 290 245 46 | luisaisenberg@kpmg.com

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