Guest post from our friends at Bergstein Abogados

Uruguay requires online companies incorporated abroad, with no presence in Uruguay, to pay taxes in Uruguay whenever their clients are located within Uruguayan territory. Online services providers (such as Netflix and Spotify) are subject to VAT at the rate of 22 percent, plus Non-Residents Income Tax (so-called IRNR) at the rate of 12 percent, both assessed over the sales price. Online services intermediaries (such as Airbnb) are subject to the same taxes, except that IRNR is assessed only over 50 percent of their sales where one of the parties of the ultimate transaction (the supplier or end-user) is based abroad.

In May this year, Uruguay’s Executive Branch issued a regulatory decree, summarized below, clarifying aspects of the tax law; and a few days ago, the Tax Office issued a special resolution spelling out certain implementation details.
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The Governments of Brazil and Switzerland have signed the Convention for Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (DTT). In line with Brazil’s commitments under the G20, the DTT, signed on May 3, 2018, incorporates certain minimum standards of the Organization for Economic Cooperation and Development (OECD) Project on Tax Erosion and Transfer of Profits (BEPS Project). It also includes an anti-abuse clause as well as an administrative assistance clause in accordance with the current international standard for exchange of information.
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Argentina’s Act 26,737, enacted in 2011, restricts foreign ownership of rural real estate. The restrictions imposed by Act 26,737 are relevant for any project that involves acquisition of rural land in Argentina .

The Act imposes several limitations. Under the Act and its applicable amendments, foreign ownership is defined as any acquisition, transfer of ownership or possession rights, whatever the type or name granted by the parties or duration of the same, in favor of a series of points, set forth below.
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The following is a guest post from Bergstein Abogados, Montevideo, Uruguay

Over the last few years, Uruguay has fully aligned with OECD standards. For example, Uruguay has entered into more than 10 tax information exchange agreements and more than 15 double taxation agreements. Uruguay became a member of the Committee on Fiscal Affairs, signed the Convention on Mutual Administrative Assistance in Tax Matters. Uruguay, and also agreed to start the automatic exchange of information in September 2018.

In this context, on December 29, 2016, Uruguayan Parliament passed the Tax Transparency Act.
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A recent report published by the United Nations’ Economic Commission for Latin America and the Caribbean (CEPAL) calculated that Latin American countries have lost more than US$98 billion in tax revenues simply  due to transfer pricing manipulation.

Latin American countries are paying close attention to such reports, leading to changes in their local regulations or approaches to audits related to transfer pricing.


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