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Uruguay VAT on foreign digital services

Since 2018, Uruguay imposed its Value Added Tax (on intermediation services) and Withholding Tax (IRNR) (on audio visual media services) on non-resident providers and intermediaries of digital or electronic services. This includes regular electronic services, but also gig & sharing economy intermediation services conducted via foreign electronic platforms e.g. Uber or Airbnb. This applies to B2B, with B2B able to rely on the reverse charge.

The current VAT rate in Uruguay is 22%. Follow VAT Calc’s global VAT and GST on digital services tracker for live updates on worldwide reforms.

What digital services are liable to Uruguayan VAT?

Uruguay has a wide definition of digital services. It includes “the “production, distribution or intermediation of films, as well as those arising from streaming or any audio visual downloads through the internet or other technological platforms, including apps or any other similar means.” This would capture income from streaming/download media; apps; e-learning; e-books and news; and much more.

Determining if Uruguayan is VAT place of supply

Like most countries, Uruguay requires the taxpayers to determine if the place of supply is in-country and therefore subject to VAT. Typically, intermediation providers may rely on:

  • IP address of the device used to access the service
  • Billing address of the customer
  • Payment address of bank or credit/debit card

VAT registration and compliance

Non-residents selling digital (intermediation) services can apply for a VAT number under a simplified procedure. This does not require a Fiscal Representative sharing VAT liabilities, but does need a resident contact party – so a VAT agent.

If the provider is not resident in Uruguay, then only 50% of the income is subject to Uruguayan tax.

There is no obligation to issue compliant Uruguay VAT invoices. Once registered, VAT is due on a quarterly basis. Although VAT returns are only due annually. IRNR are also due annually.

IRNR – non-resident Withholding Tax

Uruguay imposes its IRNR (Impuesto sobre la Renta de No Residentes), an income withholding tax for non-resident providers, on a range of digital services. Typically media (see above).

Central and South America VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Argentina 21% Apr 2018
Bahamas 10% Jan 2015 BSD 100,000
Barbados 17.5% Dec 2019 BBD 200,000
Bolivia 13% Nov 2022 -
Brazil n/a n/a n/a Various proposals
Chile 19% Jun 2020 Nil
Colombia 19% Jan-18 Nil
Costa Rica 13% Oct 2020 Nil Withholding VAT option
Dominican Republic 18% 2023? Nil Currently withholding VAT
Ecuador 12% Sep 2020
El Salvador 13% 2022 - Replace Withholding VAT
Guatemala 12% TBC
Honduras 15% 2022 HNL 250,000
Panama 10% 2022 Withholding VAT
Paraguay 10% Jan-21 Nil Withholding VAT; 4.5% DST
Peru 18% 2022 Nil Withholding VAT
Puerto Rico 10.5% Jan 2020 $100,000; or 200 transactions Marketplaces
Uruguay 22% Jan 2018 Nil VAT and Withholding Tax

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