The Uruguayan tax authority has established the deadlines to pay taxes in case of noncompliance with beneficial regimes’ requirements applicable to mergers, spin-offs and certain capital gains.

Through Resolution Num.1,057/024 the Tax Authority has regulated conditions to pay corporate income tax (CIT), net-wealth tax (NWT), personal income tax (PIT) and value-added tax (VAT), as applicable, arising from noncompliance with requirements to access tax benefits on mergers, spin-offs and capital gains from the transfer of capital participations.

In the event of a merger or spin-off, goodwill would not be recognized for tax purposes, while the transfer of capital participations in Uruguayan tax-resident legal entities would be considered made at tax cost, as long as certain conditions are met (e.g., the final owners are maintained keeping at least 95% of the proportional participation for at least two years for goodwill and four years for capital gains, providing information on the ownership chain to the National Internal Audit, among others). (For further details, see EY Global Tax Alert, Uruguay's Government enacts law for accountability for 2022, making some changes to tax regulations, dated 15 November 2023.)

If the defined conditions are not met, taxes should be paid under the general regime, without fines and surcharges, but updated by the evolution of the Indexed Unit. In addition, the acquiring legal entities or successor entities would be jointly liable for the noncompliance tax obligations.

The Tax Authority Resolution establishes the following deadlines to comply with payments of taxes in the event of failing to comply with the beneficial regimes’ requirements:

(CIT = corporate income tax, NWT = net-wealth tax, PIT = personal income tax, VAT = value added tax)

The Resolution was published on 17 May 2024. It can be accessed here (only in Spanish).