Uruguay ratified the income and capital tax treaty with Colombia through Law No. 20367 on 23 September 2024, the news was reported on Uruguayan parliament’s website,
The treaty was signed 19 November 2021, in Bogotá, Colombia.
Both countries typically use the credit method to prevent double taxation.
The agreement specifies that dividends are taxed at a maximum rate of 5% if the beneficial owner is a company that directly holds at least 20% of the capital of the payer company for a 12-month period, including the date of the dividend payment. A 0% rate applies if the beneficial owner is a recognised pension fund from the other contracting state.
In other cases, a tax rate of 15% is applicable, while royalties and technical service fees are subject to a maximum rate of 10%.
This is the first agreement of its kind between the two countries. It will take effect on the last day of the month following the exchange of ratification instruments and will be applicable from January 1 of the year after it comes into force.
