The Income Tax Treaty between Belgium and Uruguay was signed on 23 August 2013. Under the treaty the definition of a permanent establishment includes a building site, construction or installation project that continues for six months. The definition also includes the provision of services in the other contracting state by employees or other staff engaged for the purpose if they are present in that state for more than six months in a twelve month period.
According to the treaty the maximum withholding tax on dividends is 15% and will be reduced to 5% if the recipient owns 10% of the shares of the company paying the dividend. The maximum withholding tax on interest and royalties is 10%.
The treaty contains provisions on non-discrimination and exchange of information. There is also provision for a mutual agreement procedure under which the competent authorities may endeavour to resolve issues that may give rise to taxation that is contrary to the terms of the treaty.
