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June 26, 2023

Uruguay temporarily reduces VAT and IMESI rate for mineral and sparkling waters

  • A new Uruguay law establishes a value added tax (VAT) exemption on the sale of mineral and sparkling water and a refund regime for the purchase VAT.
  • And a new decree reduces the IMESI excise tax rate applicable to mineral and sparkling waters to 0%.

Due to the water emergency declared by the Uruguayan Government on 19 June 2023, the following tax measures have been implemented until the water emergency ends:

  • Law No. 20,159 establishes a VAT exemption on the sale of mineral and sparkling waters and incorporates a refund regime for the purchase VAT on goods and services intended to incorporate the cost of the exempt goods. Until now, a 22% VAT applied to the sale of mineral and sparkling water.
  • Decree No. 178/023 reduces the IMESI1 rate applicable for mineral and sparkling waters from 8% to 0%.

Law No. 20,159 was enacted on 22 June 2023 and will be effective for taxable events occurring since 23 June 2023. It can be accessed here (only in Spanish).

Decree No. 178/023 was published in the Official Gazette on 21 June 2023 and will be effective for taxable events occurring since 26 June 2023. It can be accessed here (only in Spanish).


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

EY Uruguay, Montevideo

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

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

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

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor


1 IMESI is the Spanish acronym for an excise tax that applies to a manufacturer's or importer's initial transaction for certain goods in Uruguay.


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