Uruguay imposes retrospective VAT on the supply of e-services

30 July 2018

The Uruguayan tax authority recently confirmed that VAT at 22% is applicable on the sale of e-services to consumers by non-resident businesses in the country.

Under previous legislation, non-resident businesses providing digital services in Uruguay did not have to charge VAT on their sales. However, in an effort to remove the unfair advantage that this gave to non-resident companies over local resident providers, the Uruguayan tax authorities confirmed that VAT will be applied on these types of transactions retrospectively back to January 2018.

The tax authorities also announced that there will be no VAT registration threshold applicable for these types of sales, meaning that non-resident businesses making these types of supplies will need to appoint a local representative and VAT register from the first sale that they make in the country.

This new tax will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.