Uruguay

The basic corporate tax rate in Uruguay is 25%. There are no other specific rates for the corporate income tax.

Uruguay has recently introduced the Domestic Minimum Complementary Tax (Impuesto Mínimo Complementario Doméstico) through Law No. 20,446, in line with the model of the Qualified Domestic Minimum Top-up Tax established in the Global Anti-Base Erosion Model Rules. This tax entered into force on 1 January 2026.

The global minimum tax aims for local companies to be subject to a minimum effective tax rate of 15% when certain circumstances apply: the companies need to be part of a multinational group with a consolidated annual income of EUR 750 million.

In terms of income taxation, Uruguay has traditionally adhered to the territoriality or source-based principle (under which only Uruguayan-sourced income is taxed). However, in recent decades this principle has undergone several exceptions, both with respect to income earned by companies and by individuals.

In regard to corporate income tax, foreign-sourced income is subject to tax in the following cases:

• income obtained by insurance companies for risks covered within the country;
• advertising, promotional, and technical services rendered to corporate income taxpayers;
• the commercialization of federative and image rights of athletes belonging to Uruguayan sports entities;
• income derived from derivative financial instruments;
• income arising from the transfer of shares in foreign entities that hold a certain relevant level of assets in the country; and
• income derived from the exploitation of intellectual property rights, patents, software, and other passive income obtained by entities belonging to a multinational group when such entities do not meet certain substance requirements.

In the case of individuals who are residents in Uruguay, they are subject to taxes on certain foreign‑source capital income (i.e., dividends, interest, real estate rentals) as well as on capital gains derived from the sale of such foreign assets at a 12% rate.

There is a Value Added Tax (VAT) in Uruguay applicable to both rendering of services and purchase of goods at a basic rate of 22% (there are some products that have a reduced rate of 10%).

This tax applies at all commercial stages.

There is also an excise tax in Uruguay (Impuesto Específico Interno, IMESI) which applies to the first transfer of goods, transformation of vehicles, affecting for oneself the usage of a product and the import of goods. The tax rate varies depending on the product, and there are some products which are not taxed by IMESI. All products taxed by IMESI are enlisted by law.

The products taxed by IMESI are considered sumptuous goods, which include goods such as alcoholic beverages, make-up products, perfumes, cigarettes, vehicles, motorbikes, and others.

In Uruguay the Non-Resident Income Tax (in Spanish,  Impuesto a las Rentas de los no Residentes (NRIT)) applies in cases where a company or individual with no permanent establishment in Uruguay has income from commercial activities, work income, capital gains (including dividends, utilities, and services such as advertising, promotional, and technical services rendered to corporate income taxpayers by companies based outside of Uruguay).

The NRIT works as a withholding tax with rates that vary between 0.5% and 25% depending on the type of income. For instance, dividend distribution is taxed at a 7% rate while income derived from interests in foreign currency on a term shorter than three years is taxed at a 12% rate.

Dividends distributed by local companies (such as the Subsidiary) to their non-resident shareholders are subject to non-residents income tax at the rate of 7%.

The Uruguayan counterpart of the non-resident entity is the one responsible for the withholding.

Uruguay does not have a General Anti-Avoidance Rule (GAAR) in its domestic legislation. Some scholars consider that Article 6, paragraph 2 of the Tax Code—which prioritizes substance over form in the characterization of taxable events—constitutes a provision of this type, but other scholars challenge the view and understand that such provision cannot be considered as a GAAR.

There is, however, a specific GAAR applicable to the taxation of foreign passive income earned by non-qualifying entities belonging to a multinational group. This clause provides that the Tax Authority may, through a reasoned resolution, disregard the forms, mechanism, or series of mechanisms that, having been established with the main purpose or one of the main purposes of obtaining a tax advantage that is against the object or purpose of the law, are deemed improper considering the relevant facts and circumstances. Any form, mechanism, or series of mechanisms shall be considered improper when there are no valid commercial reasons that reflect economic reality supporting their adoption or implementation.

The most frequent issues that lead to tax controversies are the request for annulment of tax assessments issued by the Tax Authority. These tax assessments are usually the result of tax inspections carried out by the Tax Authority on the taxpayer to be assessed. Once the inspection is finalized, a tax assessment is issued by the Tax Authority, which enables the taxpayer to initiate tax controversy proceedings.

These tax assessments usually understand that the taxpayer was responsible for paying taxes different from the ones actually paid. In most cases, the Tax Authority takes the position that the taxpayer should have paid more tax than it did.

In Uruguay, the process and resolution of tax controversies are ruled with all administrative procedures (these being the procedures in which the state is the counterpart).

The main rules are:

• Decree 500/991, which gives the framework for the internal administrative proceedings;
• Law 20.333, which establishes the framework for all judicial administrative disputes;
• the Uruguayan Tax Code (enacted by the Decree-Law 14.306), Chapter Third, which establishes general guidance that must rule any tax proceeding; and
• sections III and IV from Title 1 of the Unified Tax Rules 2023 issued by the Tax Authority.

For most tax controversies, it is mandatory to first finish an internal administrative proceeding before beginning the judicial proceeding.

Currently in Uruguay there are no alternative methods to resolve tax controversies other than the administrative proceeding and the judicial administrative proceeding. However, once an amount to be paid by the taxpayer is set, there is a possibility of refinancing the debt with the Tax Authority.

Scholars have been starting to enable the possibility of resolving tax controversies with the Tax Authority through arbitration.