Uruguay has issued Decree 77/2017 as a guide to Law No 19.484 which sets out the provisions on compliance with international standards for fiscal transparency.

The Decree clarifies which companies are required to provide the tax authorities with information about the average balances and income held and obtained by Uruguayan residents and non-residents taxpayers. The Decree also provides specific information about the scope and content of the information that are required to be reported.

Under the new rule, income from the transfer of shares of a company located in a low or non-tax jurisdiction which directly or indirectly holds more than 50% of its total assets in Uruguay will be deemed as Uruguayan sourced and will be subject to the corporate income tax, the non-resident income tax, and the individual income tax on residents in Uruguay.

The non-resident income tax rate applicable to income of companies located in in a low or non-tax jurisdiction has been increased to 25%. However, the dividends and profits paid by taxpayers who are subject to corporate income tax will remain as previous rate of 7% withholding tax rate.

According to the new rule, in addition to the current requirement of filling the local file, the Uruguayan taxpayers, including head offices and permanent establishments, which are part of a large multinational group and satisfy the definition of related party will have to submit an annual master file and country-by-country reports with the Uruguayan tax authorities in accordance with BEPS action plan 13. The new law also fulfills the conditions of the BEPS Action Plan 14 and allows taxpayers to apply for bilateral and multilateral Advanced Pricing Agreements (APAs) to ensure the taxation of intercompany transactions with multinational groups.

Companies that do not comply with Law 19.484 will be subject to major penalty sanctions.