URUGUAY. WORKSHOP ON BEPS Taxation of Services. Taxation of Services. Under Domestic Tax Law. (without Tax Treaty)

Transcription

1 WORKSHOP ON BEPS Taxation of Services URUGUAY ALVARO ROMANO Deputy Director Dirección General Impositiva Ministry of Economy and Finance Montevideo - Uruguay Taxation of Services Under Domestic Tax Law (without Tax Treaty) 1

2 Residents under domestic tax law Under domestic rules, services of Uruguayan source are taxed. 3 Residents under domestic tax law If the service is rendered within Uruguay, the service will be taxed, irrespective of its kind (and whether there is a PE or not). 4 2

3 Residents under domestic tax law If the service is rendered abroad (and it does not qualify as technical service), the service will not be taxed. 5 Residents under domestic tax law If the service is rendered abroad (and it qualifies as technical service), the service will be taxed. 6 3

4 Residents under domestic tax law $$ The tax is collected by way of witholding by corporate income tax taxpayers. 7 Taxation of Services Under Tax Treaties (Uruguayan Model) 4

5 Taxation of services renderd by Non Residents under tax treaties (Uy Model) URUGUAY does not include Article 14 in its Model. For this reason, and following UN recommendations, it introduces two provisions of Services PE within its Article 5, one for enterprises and another for individuals. 9 Residents under tax treaties (Uy Model) URUGUAY also suggests the introduction of technical services within Article 12, allowing therefore the source country to tax these kind of services. 10 5

6 Residents under tax treaties (Uy Model) 3. The term permanent establishment likewise includes: a) b) the furnishing of services by an enterprise through employees or other personnel engaged by the enterprise for such purpose, but only if activities of that nature continue (for the same or a connected project) within a Contracting State for a period or periods aggregating more than 183 days within any twelvemonth period; 11 Residents under tax treaties (Uy Model) 3. The term permanent establishment likewise includes: c) for an individual, the performing of services in a Contracting State by that individual, but only if the individual s stay in that State is for a period or periods aggregating more than 183 days within any twelve-month period. 12 6

7 Residents under tax treaties (Uy Model) Article 12.3.b) b) The term fees for technical services as used in this Article means payments of any kind to any person, other than those mentioned in Article 14, in consideration for any services of a technical, managerial or consultancy nature. 13 Residents under tax treaties (Uy Model) Art. 5.3.b): may be taxed in Uy if activity lasts > 183 days 14 7

8 Residentes under tax treaties (Uy Model) Art. 5.3.c): may be taxed in Uy if the individual stays > 183 days 15 Residents under tax treaties If technical services, Uy may taxed, but with limits (art b)) 16 8

9 Taxation of Services Under tax treaties OECD Model Residents under OECD Model Uy may tax if there is a fix place of business, or an PE agent. 18 9

10 Residents under OECD Model PF Optional: Services EP suggested in Paragraph Taxation of Services Under tax treaties UN Model 10

11 Residents under UN Model Art. 5.3.b): taxed in Uy if activity lasts > 183 días 21 Residents under UN Model PF Art. 14: taxed in Uy if the individual has a fixed base in Uruguay or stays for more than 183 days

12 Residents under tax treaties signed by Uruguay Services PE (UN): Korea Ecuador Finland (9 months) India (90 days) Liechtenstein Malta Mexico (+ PE for individuals) Romania Switzerland 23 Residents under tax treaties signed by Uruguay Technical services included in article 12: Hungary India Portugal Switzerland 24 12

13 Residents under tax treaties signed by Uruguay Article 14: Ecuador Hungary Portugal Switzerland 25 13