The Income and Capital Tax Treaty between Finland and Uruguay entered into force on 6 February 2013. The treaty generally applies from 1 January 2014.
The treaty is based generally on the model tax conventions of the OECD and UN. The definition of a permanent establishment includes a construction, installation or assembly project or related supervisory activities, provided that the project continues for at least six months. A permanent establishment is also created where an enterprise provides services in the other state through employees or other personnel engaged for the purpose, if the activities continue for an aggregate of nine months in a twelve month period.
The maximum withholding tax on dividends is 15%, reduced to 5% if the recipient of the dividend is a company that controls at least 25% of the capital of the company paying the dividend. The maximum withholding tax rate on interest is 10%. Withholding tax on royalties is 10%, or 5% in the case of payments for the use of, or the right to use, industrial, commercial or scientific equipment; or the use of, or right to use, software.
