The tax authorities of Uruguay issued Resolution No. 1,815/2013 regarding new rules on foreign tax credit on 26 June 2013. The resolution sets out the requirements for benefiting from foreign tax credits under the domestic law or tax treaties. According to the new resolution, taxpayers who intend to claim a foreign tax credit for taxes paid abroad must keep reliable proof of the effective payment of tax in the source country. The required documentation must state:
– the actual payment of the tax;
– a withholding tax paid in due time;
– the date of payment; and
– the amount and the means of payment.
In the case of withholding tax, the document must provide both the gross and the net income after withholding.
The amount of tax credit to which a taxpayer is entitled depends on whether the income is fully subject to tax under Uruguay’s domestic law. When part of the income is exempt from tax in Uruguay, the foreign tax credit is adjusted accordingly.
