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May 4, 2018
2018-0949

Uruguay issues Decree establishing conditions for Panama to be removed from list of countries with low or no taxation

Panama may no longer be considered a low- or no-taxation country by Uruguay, provided Panama complies with certain conditions.

On April 24, 2018, the Uruguayan Executive Power issued Decree No. 103/018, declaring that Panama may be removed from the list of countries, jurisdictions and regimes with low or no taxation (LONT) for income tax purposes and the list of LONT countries for transfer pricing purposes if Panama complies with certain requirements.

Background

In 2009, Uruguay's tax authorities (DGI) issued Decree No. 56/009, including Panama in its list of LONT countries for transfer pricing purposes. On March 14, 2017, the DGI issued Resolution No. 1,315/017, including Panama in the list of LONT countries for income tax purposes.

In response to Uruguay's inclusion of Panama on its lists of LONT countries, Panama's Ministry of Foreign Affairs, Ministry of Economy and Finances, and Ministry of Commerce and Industry issued Resolution No. 001-2018 (March 8, 2018), including Uruguay on a retaliatory list of countries that had taken discriminatory measures against Panama.

Decree No. 103/018

To be removed from the lists of LONT countries, Panama must notify the OECD's Multilateral Competent Authority Agreement's Coordinating Body Secretariat that it has identified Uruguay as an associate country for the automatic exchange of financial information. Panama must complete the identification and notification requirements before May 15, 2018. The first year for which information must be exchanged is 2017. Additionally, the Decree requires Panama to remove Uruguay from the list of countries that have taken discriminatory measures against Panama.

The effective date for Panama's removal from the lists of LONT countries will be the date on which Panama notifies the Uruguayan Ministry of Foreign Affairs of Panama's compliance with these requirements.

The DGI will be required to follow up on the compliance with these requirements, as well as publicize the date on which Panama was removed from the lists of LONT countries.

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Contact Information
For additional information concerning this Alert, please contact:
 
EY Uruguay
• Martha Roca598 2 902 3147
• Rodrigo Barrios598 2 902 3147
Latin American Business Center, New York
• Ana Mingramm(212) 773-9190;
• Enrique Perez Grovas(212) 773-1594;
• Pablo Wejcman(212) 773-5129;
Latin American Business Center, Europe
• Jose Padilla+44 20 7760 9253;
 

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