The Uruguayan Tax System is based in the application of indirect taxes, representing in l998, 55.8% ( VAT) of the tax raising, and 21.5% of the Specific Internal Tax (IMESI). On the other side, direct taxes raising Income and Patrimony is less significant regarding the total raisings.

 Value Added Tax (IVA)

Internal circulation of goods and services and imports are subject to IVA, whose basic tax is 23% and there is a minimum 14% tax for staple items and medicines, as well as a certain amount of services which are tax exonerated.

Income Tax

This tax is placed on Industry and Commerce incomes (IRIC) and it is 30% of the incomes from Uruguayan sources coming from lucrative activities done by any enterprise. IRIC taxes industrial, commercial and similar incomes and IRA (Impuesto a las Rentas Agropecuarias) taxes the incomes from farming activities. Personal Income Tax does not exist.

 Wealth Tax (IP)

The assets in the country are taxed –some debts deducted-, at the end of the annual economic exercise, with 1.5% for industrial, commercial and farming activities, 2.8% for banks and financial commerce, and 2% for the rest of legal entities.

The IP liquidated by industrial, commerce including financial activities, can be compensated with up to a 50% with the IRIC.

The tax liquidated by farming activities can drop up to a 50% with the amount generated in the same exercise by concept of IVA and IMEBA according to the farming tax the contributor has chosen .

Natural Persons tax IP with progressive taxes from 0.7% to 3%, for an exceeding of a non taxable minimum of approximately U$ 80.000.- Which is twice for assets.

 Sales Specific Tax

The IMESI taxes the first sale of some products: drinks, tobacco, fuel, cosmetics, vehicles, with variable taxes depending on the product.

 Source: Portal Uruguayo (Uruguayan Portal), Uruguay XXI, Investment and Export Promotions

 REAL ESTATE PATRIMONIAL TRANSFER TAX

Alienator and Purchaser are taxed with 2% of the value fixed by NATIONAL PROPERTY REGISTRY

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Last modification: 11/09/07