Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 10/29/2013

Uruguay - Tax implications of fees paid to foreign companies 

October 29: Uruguay’s tax administration issued guidance concerning the applicability of Uruguay’s non-resident income tax and value added tax (VAT) on payments of certain fees paid to foreign companies.

Consulta N° 5.657 states that foreign companies without activities subject to the non-resident income tax (Impuesto a las Rentas de los No Residentes—IRNR) are not subject to VAT.


However, as the guidance continues to explain, payments received by these foreign companies as fees or penalties (pago en concepto de multa o penalidad) are considered Uruguayan-sourced income, and therefore are subject to the IRNR. An example of such payments would be fees paid by an exporting company to a foreign company because of a delay in the shipment of goods.





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