Market overview

Transfer pricing is still relatively new in Uruguay, with a formal system only being implemented in 2007. Both the tax authorities and the government are still gaining experience regarding the rules, and new requirements are slowly being implemented, practitioners say.

"Uruguay is becoming closer to the OECD," said Juan Manuel Albacete, head of tax at Guyer & Regules. Although the country is not a member of the OECD, measures are being taken to ensure increased transparency. PwC reports that the government has submitted a tax bill to the Congress that includes adoption of the OECD's recommendations for country-by-country reporting (CbCR) and the master file for TP documentation. This would also allow taxpayers to apply for bilateral and multilateral advance pricing agreements (APAs). Practitioners expect the bill to be passed by the end of the year.

"We're seeing an increasingly aggressive trend from the OECD, demanding transparency and substantial changes in our legislation," said Jonás Bergstein, partner at Bergstein Abogados. "The regulations that the OECD encourages and dictates upon us are not compatible with our laws, so that means that many tax reforms are to come in order to meet the requirements of the OECD," he added.

Transfer pricing is not yet an area where the Uruguayan tax authorities are focusing the majority of their time and money, however practitioners say that the authorities are increasingly involved in training in this area.

"There is still scarce experience in TP audits and no TP case law, but we expect this to change in the near future," said Gianni Gutiérrez, head of tax at Ferrere. "The TP audits are getting more technical than they used to be, and soon taxpayers and the tax authority will clash on applicable criteria."

Nevertheless, practitioners agree that transfer pricing is a growing area in Uruguay, especially considering the recent developments regarding CbCR, master file and APAs. "More companies and firms are involved in this recent practice in the market and we expect to be busy with this area of practice," said Albacete.

Tax authorities

Dirección General Impositiva (DGI)
Av. Daniel Fernandez Crespo 1534
CP 11200 Montevideo
Tel: +59 82 1344
Website: www.dgi.gub.uy

Tax rates at a glance

(As of April 2016)

Corporate income tax rate 25%
Capital gains tax rate 25%
Branch tax rate 25%
Withholding tax
Dividends 7% (a)
Interest 12% (a)
Royalties 12% (a)
Equipment rent 12% (a)
Technical assistance payments and service fees 12%
Branch remittance tax 7%
Net operating losses (years)
Carryback 0
Carryforward 5

  1. This tax applies to non-resident corporations and individuals and resident individuals. Non-resident corporations are corporations not incorporated in Uruguay.

Source: EY 2016 Worldwide Corporate Tax Guide