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February 11, 2021

Uruguay enacts budget law for 2020-2024

The modifications made by the law increase deductions and allow nonresident service providers in the free-trade zone to provide services to consumers in the national territory.

Uruguay enacted Law No. 19.924 (Budget Law) on December 18, 2020, approving Uruguay's budget for 2020–2024. The Budget Law modified Uruguay's tax legislation and generally went into effect January 1, 2021.

The Budget Law allows taxpayers to deduct all tax losses from previous years when calculating the corporate income tax, provided that no more than five years have elapsed since the loss occurred (applies beginning with tax years ending December 31, 2020). Previously, this deduction was limited to 50% of the net taxable income for the year.

The Budget Law also repeals the provision prohibiting taxpayers from deducting expenses for real estate leases, subleases and credit contracts that were not paid electronically. The repeal is effective for tax years ending after July 31, 2020.

Additionally, the Budget Law extends the net wealth tax (NWT) treatment applicable to banks and other financial entities to companies that issue e-money. Therefore, e-money companies may deduct all their liabilities when determining the NWT and will be subject to an NWT rate of 2.8%.

The Budget Law also allows non-Uruguayan individuals to provide services from the Uruguayan free trade zone to consumers in the national territory. To provide services to the national territory, the service providers must be excluded from contributing to the social security authorities and have chosen to pay nonresident income tax. The income generated by those services must represent less than 5% of the providers' total income for the year.

The Budget Law also includes changes to donations with special benefits, value-added tax refunds on diesel purchases and NWT on rural properties, among others.


Contact Information
For additional information concerning this Alert, please contact:
EY Uruguay
   • Martha Roca (
   • María Inés Eibe (
   • Nadine Bruck (
Latin American Business Center, New York
   • Ana Mingramm (
   • Enrique Perez Grovas (
   • Pablo Wejcman (