Updates to Uruguay taxation on digital services

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August 2018

Overview

New Uruguyan tax legislation affecting the provision of services through the internet, technological platforms, computer applications, or similar means (the 'computerized means') entered into force on January 1, 2018. The government has issued regulations providing the conditions that these services should meet and the criteria to locate the service supplier and user for determining the Uruguayan-source income subject to tax. In addition, effective July 1, 2018, some local taxpayers are required to start withholding taxes on audio-visual service fee payments.

The Uruguayan Tax Authority on July 16, 2018, issued Resolution 6,409/2018, providing the tax payment due dates, which start in October 2018, as discussed below. The Resolution also includes tax compliance procedures for non-resident taxpayers with no physical presence in Uruguay and whose income is not subject to withholding tax.

The takeaway

Companies operating in the film, TV broadcasting, internet, and audio-visual sectors, as well as in the mediation and intermediation in the supply or demand of services provided through computerized means, should analyze the potential effect of these tax rules on their transactions.

Non-residents should pay particular attention to whether their Uruguayan-source income from digital services will be subject to withholding taxes. Otherwise, taxes should be paid via self-assessment and local registration.

Taxpayers also should review the specific due dates applicable for 2018, which begin in October 2018.

Contact us

Jose Leiman

Partner, PwC US

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