being taxed. If a service is taxed in the jurisdiction under the “use and enjoyment” provisions, a non-established supplier of the service may be required to register for VAT in that jurisdiction where it has customers that are not taxable persons. In Uruguay the following services are subject to the “use and enjoyment” provisions (B2B/B2C):
• The provision of services through the Internet, technological platforms, computer applications, or similar, when they are destined for, are consumed, or used economically in the country, are considered to be carried out entirely within the country.
The services to which it refers are those of production, distribution and intermediation of cinematographic films and “tapes,” as well as those derived from direct television transmissions and transmissions of any audiovisual content, including those carried out through the Internet, technological platforms, computer applications, or other similar means, such as accessing and downloading movies, will be considered entirely from Uruguayan sources, provided that the applicant is in national territory. For further details see the subsection below Digital economy.
Transfer of a going concern. Transfer of going concern rules do not apply in Uruguay. As such, VAT applies to all sales of a business or part of a business capable of separate operation including assets.
Transactions between related parties. In Uruguay, there are no specific rules that indicate the value for VAT purposes for transactions between related parties.
C. Who is liable
A VAT taxable person is any taxable person for corporate income tax purposes that makes taxable supplies of goods or services in the course of doing business in Uruguay. Additionally, taxable persons of personal income tax for independent activities are subject to VAT as well as nonresidents rendering services in Uruguay or performing business activities. No registration threshold applies. The definition of a VAT taxable person applies to a permanent establishment of a foreign business in Uruguay.
Exemption from registration. The VAT law in Uruguay does not contain any provision for exemption from registration. Registration before the tax authority is always mandatory for residents and nonresidents with permanent establishments in Uruguay. For other nonresidents, registration is not mandatory, as long as the foreign VAT taxable person is subject to withholding for the obligations.
Voluntary registration. The VAT law in Uruguay does not contain any provision for voluntary VAT registration, as there is no registration threshold.
Group registration. Group VAT registration is not allowed in Uruguay.
Fixed establishment. A fixed establishment for VAT purposes in Uruguay is defined (within Article 10 of Title 4 of IRAE) as when a nonresident carries out all or part of its activity through a fixed place of business in Uruguay, it will be understood that there is a fixed establishment of the nonresident. The term fixed establishment includes, among others, the following cases: headquarters, branches, offices, factories, workshops, mines, oil or gas wells, quarries or any other place of extraction of natural resources. The term fixed establishment also includes:
• Construction or installation works or projects, or related supervision activities, whose duration exceeds three months
• The provision of services, including consulting services, by a nonresident through employees or other personnel hired by the company for such purpose, provided that such activities are carried out (in relation to the same or a related project) during a period or periods that in total exceed six months within any 12-month period.
to register representatives. The registration should be done when operations would take place. Additionally, a notary certification in Spanish would be needed containing information of the company and the representatives. If all documents are duly provided, the registration is finished on the same day the form is submitted. The corresponding representatives of the company submit the registration. The form should be signed by a person authorized by the company, but the submission to the tax office can be done by a third party. In general, the procedures are carried out in person at the tax authority’s office, but there are certain cases (for example, sole proprietorships, or foreign companies that provide digital services) that can be registered through the tax authority’s website.
Deregistration. Deregistration is accomplished by submitting form 0355, establishing that the entity is no longer a taxable person. To deregister, the business should stop carrying on the activity that was taxed by VAT.
VAT taxable persons include, among others, CIT taxable persons who perform taxed activities, personal income taxable persons for self-employed activity and nonresident income tax (NRIT) payers, except when their activities are related exclusively to obtaining capital gains or yields of capital.
Changes to VAT registration details. Any change in the taxable person’s registration data (for example: name, address, activity carried out) must be communicated to the tax administration within 30 days from the date of the change.
The procedure can be done online or in person. If it is online, the data in the online services system must be changed, modifying what corresponds. In case of being in person, form 351 must be submitted.
D. Rates
The term “taxable supplies” refers to supplies of goods and services that are liable to VAT, including the zero-rate.
The VAT rates are:
• Standard rate: 22%
• Reduced rate: 10%
• Zero-rate: 0%
The standard rate applies to all supplies of goods or services, unless a specific measure provides for the zero-rate, the reduced rate or an exemption.
Examples of goods and services taxable at 0%
• Exports of goods
Note that the supply of goods and services to final consumers who pay for such supplies with debit cards or similar electronic instruments, benefit from a reduction in the VAT rate. This measure has been extended from 30 September 2024 to 30 April 2025. This is not a reduced rate as such, but a benefit for using a certain payment method.
Examples of goods and services taxable at 10%
• Basic foodstuffs
• Soap
• Medicines
• Services supplied by hotels in “high season” to resident individuals
• Tourist services
• Health services
The term “exempt supplies” refers to supplies of goods and services that are not liable to VAT and do not qualify for input tax deduction.
Examples of exempt supplies of goods and services
• Foreign currencies, securities, bonds, stocks and other financial transactions
• Milk
• Books, newspapers, magazines and educational material
• Water supply (unbottled) for basic family consumption
• Services supplied by hotels in “low season” to resident individuals
Option to tax for exempt supplies. The option to tax exempt supplies is not available in Uruguay.
E. Time of supply
The time when VAT becomes due is called the “time of supply” or “tax point.” The basic time of supply is either when the goods are transferred or when the services are performed. The invoice for the transaction must be issued at the time of supply.
Deposits and prepayments. In principle, the taxable event for the supply of goods and services is deemed to have taken place on the date of the invoice. However, the tax authority is empowered to establish another date whenever there is an omission, anticipation or delay in the billing.
In addition, it is important to note that the tax authority may authorize generally, for all the taxable person’s transactions, that the tax determination should be based on the date of the contracts.
Therefore, deposits and prepayments are not taxed if the taxable event does not ultimately take place (that is, if the services are not rendered or the delivery of goods does not happen) as the payments could not be considered to be the taxable event in themselves.
Continuous supplies of services. For ongoing supplies of services, the taxable event established in the Uruguayan VAT regulations is determined on a monthly basis.
Goods sent on approval for sale or return. The time of supply rules provide that for VAT purposes, the taxable event occurs whenever goods are delivered and property rights are transferred (i.e., the owner can economically dispose of them at its will).
If goods are sent for “approval” or “for sale or return,” the transfer of property on these goods would not happen. Therefore, no VAT is accounted for.
Reverse-charge services. Even though a VAT for reverse-charge regime for supplies of goods and services does not exist in Uruguay, if services are rendered in Uruguayan territory by a nonresident, the service provider is considered to be a VAT taxable person and, thus, a withholding obligation arises for the taxable person.
Leased assets. In Uruguay there are two types of leasing: operative and financial. Both are treated as continuous supplies of services from a time of supply perspective (see above).
In accordance with Uruguayan law, by operative leasing includes a contract that gives the purchase option to the client at the end of the contract, but as long as such option implies a small amount (under certain circumstances determined on local regulations). Otherwise, it would be a financial leasing.
Leasing of real estate property in accordance with the Civil Code is exempt from VAT. Other operational leases are subject to VAT. Financial leasing is considered as sales and is subject to VAT depending on the goods supplied.
The tax treatment for “leasing” transactions with financial institutions is exempt from VAT. The leasing charge is exempted from VAT in the following circumstances:
• The contract must last at least three years
• The goods subject to the contract must comply with the definition of a utility vehicle given by the Uruguayan law and cannot be a real estate property affected to housing
There is no need for an agreement between the issuer of the e-invoice and its customers when a taxable person becomes an electronic issuer. When a taxable person becomes an electronic issuer or wants to become an electronic issuer, it should start the reporting process established by tax authorities, which includes complying with a number of mandatory requirements. An agreement between the electronic issuer and its customers could be necessary in the following scenario: for documents issued by the company to taxable persons who are not included in the electronic invoicing system or to final consumers, for which the issuance of the hard copy of the document involved is required. A hard copy may not be issued if the transaction does not involve the transfer of goods and the recipient expressly authorizes the receipt of the document through other means (e.g., email). This authorization must be obtained separately from the main agreement.
Additionally, a number of modifications were implemented in December 2023. The tax authority has issued resolutions (No. 2,389/023 and 2,548/023) that extend the obligation for the mandatory use of electronic invoices, via the electronic invoicing system to all taxable persons. According to the resolutions, taxable persons registered for VAT as of 31 July 2023 and between 1 August 2023 and 30 April 2024 are required to issue electronic invoices (and as such obtain the status of electronic issuer) before 1 January 2025. This provision also applies to taxable persons who restart their activities or become VAT payers in this period, or between 1 May 2024 and 31 December 2024. For any taxable person who exclusively provides personal services as a freelancer, the deadline to acquire the status of electronic issuers is before 1 January 2025. This provision does not apply to taxable persons who meet any of the following conditions:
• Exclusively perform agricultural activities and whose income is below 4,000,000 indexed units (IU4m) during the fiscal year (approx. USD597,000) (note this threshold is determined using the IU value on the last day of the corresponding fiscal year)
• Solely carry out value-adding activities in the construction of real estate with no commercial purposes
• Subject to nonresident income tax
• Exempt from taxes on all their transactions, except for direct and indirect users of Free Trade Zones
• Included in the Monotributo, Monotributo Social Mides or Aporte Social Único PPL
When taxable persons included in the first bullet item above exceed the income threshold, the taxable persons must obtain electronic-issuer status starting from the first day of the fifth month following the closing of the fiscal year in which the taxable persons’ income exceeded the threshold.
Simplified VAT invoices. Simplified VAT invoicing is not allowed in Uruguay. Nevertheless, a separate invoice is not required to be issued for sales to final customers (i.e., for B2C not B2B sales) amounting to less than UYU200. In such cases, a general invoice should be issued at the end of each business day, including all sales that were not documented due to this exception.
Self-billing. Self-billing is not allowed in Uruguay.
Proof of exports. Uruguayan VAT is not chargeable on supplies of exported goods. However, to qualify as VAT-free, exports must be supported by customs documents confirming that the goods left Uruguay (called a DUA – “Documento Único Aduanero” – which is a single administrative document).
Foreign currency invoices. If an invoice is issued in a foreign currency, the amounts may be converted to the domestic currency, which is the Uruguayan peso (UYU), using the buyer exchange rate bill used between banks on the day before the transaction.
Supplies to nontaxable persons. Taxable persons are always required to issue invoices for transactions. Documentation related to sales should also include separately the tax to be paid and the applicable tax rate. However, this last requirement does not exist when invoices are printed in the form of tickets using cash registers or electronic tickets (e-tickets).
Records. In Uruguay, examples of what records must be held for VAT purposes include the following:
• Inventory book (which contains the balance sheets of the company)
• Diary book (which contains the accounting entries of the company)
Special accounts for VAT should also be kept and 22%-rate and 10%-rate transactions should be separated.
In Uruguay, VAT books and records must be held within the country. These records must be kept at the address recorded by the tax authorities.
Record retention period. The general statute of limitations for tax obligations in Uruguay is 5 years, which may be extended to 10 years in cases of tax fraud, or other periods may apply for promoted investment projects.
Electronic archiving. Electronic archiving is allowed in Uruguay. Physical records should be kept physically (e.g., books), and electronic records should be kept electronically (e.g., accounting system).
I. Returns and payment
Periodic returns. VAT returns are generally submitted monthly for “medium and large taxable persons.” “Small taxable persons” must submit returns annually. The mentioned classification of taxable persons is determined by the tax authorities.
Monthly VAT returns are due in the month following the month in which the transactions are reported. The deadline is published by the tax administration at the beginning of each year.
Small VAT taxable persons must file annual tax returns in the fourth month following the end of the taxable person’s fiscal year. For example, if a small VAT taxable person closes its fiscal year in December, its annual VAT return is due in April. The exact date for payment depends on the taxable person’s registration number.
In case of professional individuals, VAT returns must be submitted annually (between June and August of the following year, depending on the calendar issued by the tax authority). But payments would be done bimonthly and paid the month following the end of the bimonthly period. For example, the January to February bimonthly period would be due in March.
Periodic payments. All VAT taxable persons must make VAT payments monthly. Monthly payments are due in the month following the month in which the transactions are reported. The exact date for payment depends on the taxable person’s registration number (RUT). VAT return liabilities must be paid in Uruguayan pesos (UYU).
Payment is made by submitting the VAT affidavit monthly for taxable persons included in the medium or large taxable person group. Once that tax return is presented, the tax administration’s website will show that the company has an amount to pay for VAT. By following the steps on the page, the taxable person will proceed with payment (either by bank debit or with credit certificates if available).
For taxable persons included in the small taxable person group, since VAT is filed annually, they must anticipate the difference between VAT on sales and VAT on purchases for the current month on a monthly basis. The procedure is the same as the aforementioned, except that instead of
submitting an affidavit, they will make a ticket payment (form found on the website) where the data will be completed indicating what will be paid.
Digital economy taxable persons (i.e., those who have income derived from the digital economy, such as those supplies mentioned in the above subsection Digital economy) may choose to file their tax returns (and execute their tax payment) in USD as long as:
• All transactions are documented in that currency
• The taxable person does not carry out other taxed activities in the country, or if they do, they are subject to withholding
If taxable persons choose this option, it must be maintained for at least three fiscal years, provided the conditions to access the option are still met.
For annual VAT returns, if the annual purchase VAT is greater than the annual sales VAT, the VAT credit is carried forward to the next fiscal year until it has been absorbed by VAT on sales.
Electronic filing. Electronic filing is mandatory in Uruguay for all taxable persons. There are, however, some exceptions, for example, if a tax return is reassessed and it includes a fiscal credit.
Payments on account. Payments on account are generally not required in Uruguay, except for certain taxable persons. In certain situations, taxable persons must perform payments in advance before their annual tax return, depending on the company and its activities. The total advanced payments could cover the actual tax due for the whole fiscal year, and therefore, the taxable person could benefit from filing a provisional annual tax return, filed prior to the compulsory date in which it should be submitted, obtaining as a result fiscal credit (see the Annual returns subsection below).
Special schemes. VAT for small enterprises. Small taxable persons that have not exceeded certain revenue thresholds in the previous fiscal year (approx. UYU1,792,000) can opt to account for VAT through a special regime called “VAT for small enterprises.” Taxable persons using the scheme make reduced and fixed VAT payments on a monthly basis.
Annual returns. A VAT taxable person can submit a provisional annual tax return with the sole purpose of requesting fiscal credits with the tax administration. This is because in certain situations taxable persons must perform payments in advance before their annual tax return, depending on the company and its activities (see the Payments on account subsection above). The taxable person could benefit from filing a provisional annual tax return, filed prior to the compulsory date in which it should be submitted, obtaining as a result fiscal credit. This must be analyzed on a case-by-case basis to verify that the company is in a position to request a tax credit from the tax authority to, for example, cover the payment of other taxes.
Supplementary filings. There are several supplementary filings that apply, depending of the type of business, the type of VAT regime and the type of operation. Examples include:
• Informative form 2181, including details of VAT on sales and purchases, which is applicable only to relevant or large taxable persons
• Informative form 2183, including details of some VAT withholdings
Correcting errors in previous returns. In case of errors or omissions in previous returns, what must be done is to resubmit the affidavit. To do this, the taxable person must present the tax return again entering all data that had been presented at the time and fixing the error or omission.
If an amount to be paid arises, the amount must be paid with fines and surcharges calculated, taking into account the date on which the amount should have been declared and the date on which it will actually be paid (see the Penalties for errors subsection below). Otherwise, if the result is a tax credit, it may be requested through credit certificates and it may be used later for the payment of other taxes collected by the tax administration.