Tax Insight

Tax updates on Uruguayan DMTT under Pillar Two

Insight
5 minute read
October 02, 2026

What happened?

Uruguay published Decree 206/026 in the Official Gazette on September 8, 2026. This decree repeals Decree 325/025, which established the conditions under which Uruguayan Constituent Entities (CEs) of Multinational Enterprise (MNE) Groups covered by a tax stability clause in force when the Domestic Minimum Top-up Tax (DMTT) entered into effect, could qualify for a (full or partial) exemption from the tax.

The new decree replaces the referred exemption regime with a ‘compensation’ mechanism and sets out the DMTT obligations applicable to these taxpayers.

The migration from an exemption scheme to a tax obligation and subsequent compensation mechanism reflects Uruguay’s efforts to ensure that the DMTT complies with and qualifies for OECD rules, while respecting previously assumed tax stability commitments with taxpayers.

Why is it relevant?

In December 2025, in line with the OECD’s Pillar Two framework and through Budget Law 2025-2029, Uruguay introduced a DMTT to ensure that large MNE Groups are subject to a minimum effective tax rate of 15% in Uruguay. The DMTT applies to fiscal years ending on or after December 16, 2025. CEs of MNE Groups covered by a tax stability clause in force when the DMTT entered into effect may be eligible for (full or partial) compensation, provided applicable conditions are met.

Under Decree 325/025 (now repealed), qualifying CEs could be fully or partially exempt from the DMTT, provided certain conditions were met. Under the new regime, these CEs must calculate and pay the DMTT and claim compensation, subject to review and approval by the General Tax Office (DGI). However, payment may not be required if the DGI determines the compensation amount and notifies the taxpayer before the DMTT due date.

The overall DMTT regulations are still pending and not published. Key matters expected to be addressed include safe harbor considerations, asymmetric foreign exchange differences treatment, income exclusions, and allocation rules among CEs.

Actions to consider

Qualifying Uruguayan taxpayers (i.e., those covered by a tax stability clause) potentially affected by the DMTT should assess whether they meet the conditions for full or partial compensation and proceed to prepare the supporting information required to initiate the administrative proceeding before the DGI. Where the applicable conditions are met, the compensation mechanism may provide substantial tax relief.

Early assessment and filing of the compensation claim may also allow the compensation amount to be offset against the DMTT liability, thereby avoiding an upfront tax payment followed by a subsequent reimbursement, provided that DGI determines the compensation amount and notifies the taxpayer before the DMTT due date.