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18 July 2022

Uruguay’s Executive Power presents accountability bill for 2021 to Parliament

  • The bill would reduce tax rates on certain interest income and exempt interest income from nonresident income tax in certain circumstances.

  • Taxpayers should analyze their operations to determine the effect, if any, the bill might have on their business.

On 30 June 2022, Uruguay’s Executive Power presented to the Parliament the national accountability bill for 2021. The proposed tax measures would be effective 1 January 2023.

For individual taxpayers, the bill would reduce the tax rates on interest income derived from deposits, debt securities and other capital income. The new tax rates would vary from 0.5% to 12%, depending on the type of transaction, the currency and the terms granted.

Regarding the nonresident income tax, the bill would exempt interest income from debt securities and financial trusts issued by a corporation taxpayer from nonresident income tax if more than 90% of the corporation’s assets generate non-taxable income.

The bill also would establish that debts owed to the National Agency of Development may be deducted from the net worth tax calculation. Additionally, the bill would modify the calculation of the net worth tax on agricultural activities by excluding the surface occupied by protected natural forests from the computation.

The bill would increase the cap on annual deductions for special donations made to certain institutions from UYU533,439,871 (approx. US$13,306,000) to UYU550,000,000 (approx. US$13,750,000).

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For additional information with respect to this Alert, please contact the following:

EY Uruguay, Montevideo

Martha Roca | martha.roca@uy.ey.com

María Inés Eibe | ines.eibe@uy.ey.com

Ernst & Young LLP (United States), Latin American Business Center, New York

Ana Mingramm | ana.mingramm@ey.com

Pablo Wejcman | pablo.wejcman@ey.com

Enrique Perez Grovas | enrique.perezgrovas@ey.com

Ernst & Young Abogados, Latin America Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Lourdes Libreros | lourdes.libreros@uk.ey.com

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

Raul Moreno, Tokyo | raul.moreno@jp.ey.com

  • Luis Coronado, Singapore | luis.coronado@sg.ey.com

    Document ID: 2022-5676

     
     

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