Knowledge & Opinions
04 Apr 2017

Uruguay: Special tax advantages

Uruguay is offering special tax advantages to companies with subsidiaries in different countries that are in need of the same services. Uruguayan companies may also benefit from the special tax advantages, provided that 95% of the services that they offer are provided to foreign firms. MSI's Uruguayan multi-disciplinary member Rodolfo Hirschfeld & Associates explains further.

This interesting article by Rodolfo Hirschfeld & Associates lists various special tax advantages in Uruguay. The services provided by the companies should fall under the following categories:
  • Data processing (which includes accounting)
  • Management
  • Financial administration
  • Support of R&D (I&D)
  • Technical consulting
  • Logistics and warehousing
The offered tax advantages are:
  • Exemption of Corporate Income Tax From 70% up to a 100% of CIT for 3 fiscal years up to 10 fiscal years (depending on number of new jobs created and amount invested in capacitation plans).
  • Exception on withholding of Resident or Non Resident Income Tax on dividends The same amount exempted from Corporate Income Tax will also be exempted from withholding of Resident or Non Resident Income Tax on dividends.
  • Wealth Tax exemption 100% exemption from wealth tax on all IT assets for the same period as that of the granted Corporate Income Tax exemption
To obtain the above-mentioned tax exemptions, the following conditions have to be fulfilled:
  • Create more than 100 new quality jobs after 3 fiscal years of operation, which must be maintained at least for a further two years, 75% of which must be positions held by Uruguayans.
  • Implement a capacitation plan costing in total more than approx. USD$ 1,160,000 - during the first 3 fiscal years.
The full and complete tax exemption for Uruguayan companies licensed to operate as a "Zona Franca" (Free Trade Zone) user continue existing as before. Once such a license has been obtained, the company is exempted of all Uruguayan taxes, and it's shareholders are exempted from withholding of Resident or Non Resident Income Tax on dividends. Two conditions have to be fulfilled:
  1. Activities are carried out with foreign countries (offshore)
  2. Some new jobs for Uruguayans are created
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