November 15, 2023
Uruguay's Government enacts law for accountability for 2022, making some changes to tax regulations
- Uruguay has approved the Accountability Bill.
- This Alert highlights a handful of changes made in the final bill from the earlier proposal.
- The new law will be effective as of 1 January 2024.
On 8 November 2023, the Uruguayan Parliament approved Law 20,212, which introduces certain changes to the tax regulations. In general terms, the changes proposed in the bill presented on 30 June 2023 were sustained. (For details, see EY Global Tax Alert, Uruguay's Executive Power submits accountability bill with tax provisions to Parliament, dated 14 July 2023.)
However, the following changes were added:
- The comprehensive list of institutions included as beneficiaries for the Corporate Income Tax special donations regime has been updated.
- Capital gains derived from the transfer of equity participations of legal entities that are tax resident in Uruguay will be exempted from Personal Income Tax when certain conditions are met.
- The Executive Branch is empowered to allow taxpayers who owe Social Security Assistance Tax, but have not paid their tax obligations, an opportunity to apply for a payment facilities regime until 31 December 2022.
- The Executive Branch is empowered to establish a value added tax (VAT) refund system applicable to certain purchases made in stores located within a maximum radius of 50 kilometers from the border crossings with the Republic of Argentina and the Federative Republic of Brazil.
- The Executive Branch is empowered to determine the conditions and limits for remote work in the Free Trade Zone, including conditions such as: the distance between the worker's domicile and his habitual place of work; the number of employees on the employer's payroll; or the relevance of the employer's associated investment. Further, it is established that remote work cannot be conditioned on a minimum number of employees that an employer has.
The Law will be effective as of 1 January 2024. To date, it is pending publication in the Official Gazette. The text of the Law can be accessed here (only in Spanish).
For additional information with respect to this Alert, please contact the following:
EY Uruguay, Montevideo
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor