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8.2.2. Withholding Taxes

A withholding tax on specified payments to non-residents is due on the gross payments.

Domestic tax laws contain certain special anti-abuse provisions wherein payments to residents of low or no-tax jurisdictions (see Sec. 12.5.) or those covered under a special regime are subject to an increased withholding tax of 25%.

Dividend

Tax is withheld at the rate of 7% from gross dividends distributed to non-residents.

Effective 1 March 2017, companies are required to calculate and pay withholding tax on notional dividends deemed distributed to shareholders (including non-residents), with a credit for the tax paid provided for the shareholders when actually distributed.

Interest

Interest paid to non-residents is subject to withholding taxes at the rate of 7% in the following cases:

  • Interest paid by financial institutions out of deposits in domestic currency or indexed units with more than a 1-year term;
  • Interest on bonds with a term of more than 3 years issued through a public offer and quoted on the stock exchange;
  • Certificates of participation in financial trusts with a term of more than 3 years; and
  • Interest from 1-year term deposits or deposits of less than one year.

The tax is withheld at the rate of 12% on other interest.

Royalty Copyright

Tax is withheld at the rate of 12% from gross royalties paid to non-residents.

Royalty Patent

Tax is withheld at the rate of 12% from gross royalties paid to non-residents.

Royalty Trademark

Tax is withheld at the rate of 12% from gross royalties paid to non-residents.

Service Management

Tax is withheld at the rate of 12% on payments made by a Uruguay resident for management services performed outside of Uruguay by a non-resident without a Uruguay permanent establishment.

Service Technical

Tax is withheld at the rate of 12% on payments made by a Uruguay resident for technical services performed outside of Uruguay by a non-resident without a Uruguay permanent establishment.

Digital Supplies

Effective 1 July 2018, tax is withheld at the rate of 12% on the digital supply of audio-visual services providedby anon-resident (see Sec. 5.5. for source rules). Certain legal entities are regarded as withholding agents (e.g., Uruguayan corporate income taxpayers, state and local governments and others) responsible for withholding tax on payments made or fees credited for the digital supply of audio-visual services.

The 12% tax also applies in relation to mediation or intermediation services provided by a non-resident.However, the withholding requirements are currently suspended, and the non-resident is required to register to pay the corresponding tax.

Below is a discussion of domestic withholding tax rules for most of the common cross border payments.

Capital Gains
12%
Dividends
7%
Interest
12%
Royalty Copyright
12%
Royalty Patent
12%
Royalty Trademark
12%
Sales
0%
Service Management
12%
Service Technical
12%

* Rates are current as of 29 January 2023