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.
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|
|Bahamas||10%||Jan 2015||BSD 100,000|
|Barbados||17.5%||Dec 2019||BBD 200,000|
|Costa Rica||13%||Oct 2020||Nil||Withholding VAT option|
|Dominican Republic||18%||2023?||Nil||Currently withholding VAT|
|El Salvador||13%||2022||-||Replace Withholding VAT|
|Paraguay||10%||Jan-21||Nil||Withholding VAT; 4.5% DST|
|Puerto Rico||10.5%||Jan 2020||$100,000; or 200 transactions||Marketplaces|
|Uruguay||22%||Jan 2018||Nil||VAT and Withholding Tax|