Share with your friends

Uruguay: Simplified stock corporations available for sole proprietorships, tax relief measures

Uruguay: Simplified stock corporations available

Legislation provides a new form of corporation, and offers tax relief for sole proprietorships that convert their business in to a simplified stock company.


Related content

The legislation (Ley N° 19.820) is intended to promote entrepreneurship by establishing a “simplified stock corporation” (sociedad anónima simplificada—SAS).

The SAS is a new type of commercial entity that has characteristics in common with corporations (as governed by Law No. 16.060). The SAS can be formed by a single person, and does not require certain approvals or publication of notices. The SAS will be jointly and severally liable for the obligations of the owner of the sole proprietorship prior to the conversion and derived from the activity of the sole proprietorship. There are rules governing the treatment of certain debts and liabilities.

Tax relief

Specifically concerning taxes, a temporary tax exemption regime applies when certain conditions are met, including:

  • Resident natural persons transfer or integrate their commercial, industrial or service-oriented business into an SAS
  • The conversion into an SAS is completed within 12 months of the law’s date of enactment
  • The tax liabilities and filings by the sole proprietorship are up to date with the tax administration
  • The transfer of the business into the SAS is in exchange for the issuance of shares

The exemption from tax is available for certain direct taxes (includes the impuesto a las rentas de las actividades económicas (IRAE) or impuesto a la renta de las personas físicas (IRPF)) realized from the transfer and for value added tax (VAT) with regard to the assets or capital transferred. 

If, however, within two years of the conversion into an SAS, the shares of the SAS are partially or completely transferred, the tax exemption is forfeited, and the taxes resulting from the transfer must be re-liquidated and paid to the tax administration (DGI) within the following month.

Read an October 2019 report (Spanish) prepared by the KPMG member firm in Uruguay

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal