Foreign income considered as Uruguayan source income for IRAE purposes


In 2021, the European Union Code of Conduct for Business Taxation (COCG) requested Uruguay to commit to amending aspects identified as potentially harmful in our tax system, amendment effective January 1, 2023.

To comply with said commitment, November 2022, Law 20,095 was approved means of which they were established regulatory changes regarding certain foreign income obtained by IRAE taxpayers that are part of a multinational group.

The modifications will take effect for fiscal years beginning on or after January 1, 2023.

Law seeks to consider certain income obtained abroad by a taxpayer who is a member of a multinational group as a Uruguayan source and, therefore, subject to IRAE. In other words, if the taxpayer is not part of a multinational group, it shall not be affected by the proposed changes.

As established in its regulations, a multinational group comprises a set of two or more related entities that consolidate Financial Statements, resident in different jurisdictions, as well as the parent company and its permanent establishments.

Victoria Guadalupe, Certified Accountant from Auren Uruguay