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February 11, 2021
2021-0318

Uruguay modifies when goodwill is not considered in corporate restructurings

Taxpayers will not have to consider goodwill in corporate restructurings if certain requirements are met.

In Decree No. 21/021, Uruguay's Executive Power modifies the requirements taxpayers must meet to not consider goodwill in mergers or spin-offs that are part of a corporate restructuring.

The decree modified the requirements companies must meet to not consider goodwill for tax purposes in corporate restructurings. Under the decree, goodwill will not be considered if:

  1. The ultimate beneficial owners (UBOs) of the companies participating in the deal remain in the structure, maintaining at least 5% of their equity proportions, and the UBOs are not modified for at least two years from the date of the merger or spin-off agreement.
  2. The affidavit filed before the Uruguayan Central Bank includes information on the whole chain of ownership, identifying all the UBOs.
  3. The core business of the predecessor companies is maintained for at least two years from the date of the merger or spin-off agreement.

The decree went into effect January 22, 2021.

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Contact Information
For additional information concerning this Alert, please contact:
 
EY Uruguay
   • Martha Roca (martha.roca@uy.ey.com)
   • María Inés Eibe (ines.eibe@uy.ey.com)
   • Nadine Bruck (nadine.bruck@uy.ey.com)
Latin American Business Center, New York
   • Ana Mingramm (ana.mingramm@ey.com)
   • Enrique Perez Grovas (enrique.perezgrovas@ey.com)
   • Pablo Wejcman (pablo.wejcman@ey.com)
 

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