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Business Taxation in Uruguay
 
 
 

General

Uruguay corporate income tax (IRAE) rate is 25%. IRAE is levied on resident legal entities and permanent establishments of non-resident entities. Non-residents with no permanent establishment in Uruguay are subject to a new specific tax on income of non-residents (impuesto a la renta de los no residentes).

Corporations and individuals are subject to corporate income tax (IRAE) on their net income of Uruguayan source originating from industrial, commercial and agricultural activities at a rate of 25%.

Persons deriving income from agricultural activities may opt to be subject to IRAE or, alternatively, to the tax on disposal of agricultural goods (IMEBA). However, this option is not available to certain types of companies which must always be subject to IRAE.

Uruguay tax year is the same as the commercial year of the company, provided that adequate accounting records are kept. Otherwise, the fiscal year is the calendar year. In either case, companies must file their tax returns by the end of the fourth month following the end of their tax year end.

Advance tax payments are made on account of the final liability for the relevant tax year. If the total advance payments exceed the final liability, a refund is made by means of credit certificates which may be used to pay the taxpayer's future taxes but may not be repaid.

Capital Gains Tax

Capital gains are subject to the same fiscal treatment as normal taxable income and must be included in the same tax return.

Branch Profits Tax

Branches of foreign corporations are subject to IRAE and IMEBA at the same rate as resident companies. Dividends, profit distributions or remittances paid or credited abroad by taxpayers subject to IRAE are also subject to a withholding tax called IRNR at the rate of 7%. Repatriations of branch profits to a head office outside Uruguay are subject to this tax.

Fringe Benefits Tax

Corporations and individuals are subject to social security taxation on all salaries and fringe benefits paid to employees at the rate of 7.5% plus 5% of medical care. Additionally, employees are subject to a withholding of 21% on the amounts received. Both percentages are due monthly on amounts paid for the previous month.

Local Taxes

Two principal municipal taxes are in force in Uruguay. The main one is 'real property contribution' and is due to municipal authorities on land and buildings located in their area. It represents a percentage (generally 1.5%) of the cadastral value and is due yearly over three to six payments. The second tax is payable by owners of buildings on a monthly basis for the services rendered by the local authority. This amount is adjusted periodically according to current inflation.


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