Uruguay VAT on foreign digital services

Thu 26th Jul 2018

Uruguay has clarified the liabilities to VAT for non-resident providers of digital or electronic services. The current VAT rate in Uruguay is 22%.

In Decree 144/018, supplies of streaming media, games and related electronic services over the internet by non-resident providers to Uruguayan resident consumers was confirmed as liable to local VAT. Typically, residency within Uruguay is determined on the IP or billing address of the consumer. Failing this, if the settlement of the fee is made in Uruguay, this triggers the VAT liability.

Any non-resident providing to a local consumer will have to VAT register, including appointing a local representative, to settle the VAT due. Settlement is due on a quarterly basis. There is no VAT registration threshold. The above requirements have been retrospectively applied from 1 January 2018, although settlement of the VAT for the first two quarters of the year has been delayed until 2019.

For B2B transactions, the local tax payer must act as a tax withholding agent and settle the VAT liabilities directly.

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