Uruguay has updated its Pillar Two QDMTT rules, replacing the previous exemption for entities covered by fiscal stability clauses with a compensation mechanism and setting out new procedural requirements for eligible taxpayers.
Uruguay has issued Decree No. 206/026, replacing the exemption from the Pillar Two Qualified Domestic Minimum Top-Up Tax (QDMTT), known as the Impuesto Mínimo Complementario Doméstico (IMCD), for entities covered by certain fiscal stability clauses.
The decree, promulgated on 31 August 2026 and published on 8 September 2026, establishes a compensation mechanism for eligible taxpayers instead of exempting them from the tax.
The measure implements Article 666 of Law No. 20.446 of 16 December 2025 and seeks to provide legal and tax certainty regarding fiscal stability clauses that were in force when the Domestic Minimum Top-up Tax entered Uruguay’s legal framework.
QDMTT obligations for multinational groups
Under the decree, all Constituent Entities of a multinational group that exceed the income threshold under Article 3 of Title 21 of the Consolidated Text 2023 and have a Domestic Minimum Top-up Tax allocated to them in Uruguay must comply with the relevant formal obligations and pay the tax.
Eligible entities covered by a fiscal stability clause may instead seek compensation where the State is required under that clause to compensate them for an increase in taxes resulting from a legislative change, including the Domestic Minimum Top-up Tax.
Requirements for claiming compensation
To claim compensation, taxpayers must submit an administrative file to the Dirección General Impositiva containing information including the multinational group’s identification and organisational chart, the relevant Country-by-Country Report, details of the entities covered by the stability clause, the applicable clause, and the calculation of the Domestic Minimum Top-up Tax.
The application must also identify foreign entities subject to the Global Minimum Tax or other foreign taxes against which the Domestic Minimum Top-up Tax may be taken into account or credited. Taxpayers must provide certification from an internationally recognised audit firm for the compensation amount, with translation, legalisation and apostille where applicable.
Compensation based on foreign tax reduction
The compensation will equal the difference between the Domestic Minimum Top-up Tax paid in Uruguay and the reduction in foreign taxes resulting from payment of the domestic tax in Uruguay. Taxpayers must also waive tax secrecy to allow the Dirección General Impositiva to share relevant documentation with the Inclusive Framework.
Fiscal stability clauses covered
The fiscal stability provisions covered by the decree include those under Articles 19, 20 and 25 of the Free Zones Law for eligible Free Zone Users, Article 43 of the Forestry Law for qualifying forestry taxpayers, and specific agreements between the Uruguayan government and multinational groups signed before the Domestic Minimum Top-up Tax took effect.
Review and use of approved compensation
The Dirección General Impositiva will review applications, may request additional information, and will notify taxpayers of its decision. Where the compensation is determined before the Domestic Minimum Top-up Tax becomes due, the taxpayer may use the approved amount towards payment of the tax.
The decree repeals Decree No. 325/025 of 29 December 2025, which had previously addressed the application of fiscal stability clauses but did not establish the related procedural requirements. Uruguay’s IMCD was introduced as part of the National Budget for 2025-2029 and applies to fiscal years ending on or after 31 December 2025.
