Taxpayers must submit an annual transfer pricing return when they have carried out annual transactions subject to the transfer pricing rules that amount to more than 50 million index units (unidades indexadas, approximately EUR 5.3 million), or when they have been instructed to do so by the tax authorities.
When required, the annual disclosure should be made within 9 months of the end of the previous tax year, and includes:
- Details of operations during the transfer pricing period;
- The financial statements for the period;
- A transfer pricing study; and
- (Transfer Pricing Return) Form 3001.
The annual transfer pricing return, Form 3001, requires reporting of significant information on the MNE group and related parties including:
- The financial information of the local entity;
- The list of all the related entities including their address, jurisdiction, number of employees, identification number and details of their functions and operations;
- The type of relations between the taxpayer and each of the related entities;
- The nature of the controlled transaction and the type of activity undertaken by the related entities in these transactions;
- A description of the in-force agreements with the related entities;
- A description of all the intangible property of the local entity and the ones that are used by the taxpayer even if they are not owned by the taxpayer; and
- An extensive questionnaire of the company’s operating activities with entities outside Uruguay.
Uruguay requires that taxpayers prepare and maintain a transfer pricing study and supporting documentation when the requirements for annual disclosure (above) are met.
The documentation should include:
- Details of the business;
- A functional analysis;
- A risk analysis;
- Details of controlled transactions;
- The methods selected, including the reason for their use and the rejection of other methods;
- Details of the comparables used;
- An economic analysis; and
- Details of the foreign party with which the transactions are conducted.
Generally, transfer pricing documentation should be prepared within 9 months after the end of financial year.
Effective 1 January 2017, Uruguay’s new TP regulations include the three-tier documentation requirements developed as part of BEPS Action 13, including a Master file, Local file, and Country-by-Country (CbC) reporting requirements.
For taxpayers that are not required to make annual disclosures, documentation requirements are not set. However, documentation substantiating the compliance of their transactions with non-resident related parties or parties in no or low tax jurisdictions (see Sec. 12.5.) should still be kept.
Master file requirements based on BEPS Action 13 are introduced in the Uruguayan Law for fiscal years beginning on or after 1 January 2017. The Master file generally contains information on the group's organizational structure, activities, functions performed, assets used, and risks assumed by each entity, intangible assets, and financing. The regulations necessary to enforce the Master file requirements are not yet issued by Uruguay.
There are no thresholds prescribed for Local file. However, the Local file must be prepared if there is a transaction with a related party. The Local file generally includes the transfer pricing documentation prepared in accordance with the domestic regulations (see above).
CbC reporting requirements based on BEPS Action 13 are applicable for fiscal years beginning on or after 1 January 2017. The revenue threshold for CbC reporting for Large Multinational Group is the standard EUR 750 million or equivalent, with an exclusion where a group does not meet the relevant reporting threshold established in the jurisdiction of its ultimate parent.
The primary reporting obligation falls on the ultimate parent entity of the group (UPE) if resident in Uruguay. Under a secondary filing obligation, constituent (non-UPE) entities are required to file locally in Uruguay except where a group member has submitted a CbC report in a jurisdiction with which Uruguay has a valid information exchange agreement and the report can be effectively exchanged with Uruguay.
Where there are more than one Uruguayan constituent entities of the same MNE Group and the secondary local filing requirements apply, the MNE Group may designate one of such constituent entities to file the CbC report and notify the Uruguayan tax authority that the filing is done on behalf of all the constituent entities in Uruguay.
The CbC report is required to be submitted within 12 months following the end of the reporting period under the terms and conditions determined by the General Tax Directorate.
The CbC notification for the reporting entity, the ultimate parent, and constituent entities in Uruguay is required to be submitted annually by the end of the reporting fiscal year through the General Tax Directorate website (applies regardless of the reporting entity's residence or where the report is to be submitted).
Where the CbC report is required to be filed locally in Uruguay, the contents of the CbC report must include the following for each jurisdiction:
- Identification of each of the entities that make up the multinational group along with their country of tax residence, or the country of incorporation when it differs from their country of residence;
- Main business activities of each of the entities;
- Consolidated gross income, distinguishing between those obtained with related and independent entities;
- Profit for the year before income tax;
- Income tax accrued and tax paid in the year in the year;
- Share capital;
- Accumulated results;
- Number of employees; and
- Tangible assets.
The CbC report format in Uruguay may vary from the OECD format. Therefore, the CbC reports filed in Uruguay may require customization as per the domestic law.
The documentation should be in Spanish language.
There are no specific transfer pricing adjustment penalties in Uruguay. Adjustments will be subject to standard tax penalties (see Sec. 13.5.). In general, the maximum penalty of 20% for "late payments" will be applied.
Additionally, penalties for non-filing, late or incomplete filing of TP documentation and CbC may attract fines ranging from EUR 224 to EUR 224,000