Taxpayers given longer to pay tax in Uruguay

Resolution 818/2010 issued by the GTB applies to corporate income taxpayers who fall under the rule requiring them to file a special tax return as well as fulfill the transfer pricing documentation requirements, corresponding to the fiscal year ending 2009. It allows these companies to pay the income tax originated by the application of the transfer pricing regime, within the ninth month after the closing date of the fiscal year. Until that date, the CIT payment will be exempted from any fines and surcharges.

This benefit will apply only to CIT taxpayers with a fiscal year ending during 2009. Taxpayers with a fiscal year ending in 2010 will be subject to the initial deadline, in other words they will have to pay the CIT within four months from their company’s year end.

In Resolution 819/2010, retroactively effective from December 2009, the GTB states that related-party status applies when the main activity of the entity is derived from agreements on an exclusive basis of agent , distributor, concessionaire or provider of goods, services or rights. The main activity is defined as the activity from which at least 50% of the total income earned by the entity in the corresponding fiscal year is derived.

“The definition of related parties under Uruguayan transfer pricing rules is rather broad,” warns Maria Jose Santos of PricewaterhouseCoopers in Uruguay.”