Uruguay weathered the global economic recession better than most of its Latin American neighbours. Low poverty rates, political stability and low levels of corruption contribute to the country's economic success.
Despite its stable economic climate, Uruguay is expecting an increase in the tax burden placed upon individuals and corporations. A proposed bill announced by Danilo Astori, minister of economy and finance, will increase various tax rates that if passed, would be effective in 2017.
The proposed changes would, among other things, affect social security tax and various corporate income tax measures. Social security tax would be increased from 20% to 23% for income over 50,100 pesos ($1,738), and from 25% to 29% for income over 167,000 pesos, EY reports.
The changes to the personal income tax rates would be as follows:
"Some of these changes may be unconstitutional, some of them we are analysing," said Gianni Gutiérrez, partner at Ferrere. "This law is supposed to be in effect in 2017, so we think we will have a lot of work regarding it this next year."
Although Uruguay's economic situation is better than that of its neighbours, the country still has a lot of social problems that the government needs money to help correct. "Insufficient education and families without appropriate housing are some of the problems we [Uruguay] need money for," said Jonás Bergstein, partner at Bergstein Abogados. "We have spent too much money, we've wasted it, so now the government is increasing taxes," he said.
The tax authorities have become more active over the past few years, as the global economic recession has threatened the country. This has also meant more dispute work for the tax law firms. "Tax audits have increased because Uruguay's economic situation hasn't been very good over the past two years," said Gutiérrez. "The large companies are not in agreement with the positions the tax authorities have taken regarding some laws, and the authorities want to collect money, so we have seen several cases regarding that," he added.
"Governments all over the world need money and therefore tax offices become more and more greedy, trying to get funds wherever they can," Bergstein said. "I believe taxation will be an area of growth for Uruguay."
Gustavo Melgendler, partner at KPMG, agreed that the authorities will continue to be aggressive in their auditing in the coming years. "[The discussion around] what's acceptable and not, in terms of tax planning, tends to give more strength to the tax authorities," he said. "The international trends are reflecting in the attitude of the authorities, and in Uruguay, the tax office has been particularly aggressive."
|Corporate Income Tax||25%|
|Capital Gains Tax||25%|
|Royalties from, for example, patents, know-how||12%||A|
|Technical assistance payments and service fees||12%|
|Branch Remittance Tax||7%|
Arcia Storace Fuentes Medina Consultores advises local and international clients on national and municipal taxes, tax planning, legal advice on tax proceedings, and legal representation in tax administrative and court proceedings. Sebastián Arcia, who has experience in designing and structuring M&A operations, leads the tax law practice. He specialises in tax law and restructurings and has participated in administrative and judicial proceedings. Arcia is also a professor of financial law at the University of Montevideo and the University of the Republic.
Bergstein Abogados's tax team of two partners is led by Jonás Bergstein. Domingo Pereira is the other partner. The firm is known as a leading tax group, and Bergstein is recognised by his peers for his skills within taxation. The firm's services include international tax planning, structuring transactions, including M&A, divestitures, spin-offs, tax due diligence, structure of pass-through entities and international tax services to create tax-efficient operations.
The firm also advises on all aspects of transfer pricing, represents clients in tax disputes, gives advice on the tax implications of operations through Uruguay's free zones, advises on employment tax issues, including employee stock ownership plans, and international trading operations.
In the past year, the firm gave tax advice to a French hotel group in connection with the Uruguayan law implications of its worldwide reorganisation. The firm also gave legal advice on VAT to an American multinational nutrition supplement corporation regarding intercompany changes.
The firm advises in sectors such as banking, government and public policy, telecommunications, real estate and industrial goods and services.
Leonardo Costa Franco leads the tax practice at Brum Costa Abogados. The firm is a boutique, and it provides local and international companies with tax advisory, consulting and litigation services.
Gonzalo Lucas leads Deloitte's tax practice in Uruguay, which comprises three partners and 95 other professionals. It advises companies in the agribusiness, retail, manufacturing, real estate and financial service industries. It has specialists dedicated exclusively to the taxation of the agriculture sector. The firm's professionals combine tax, accounting and financial knowledge to assist clients with tax planning, preparation and review of tax assessments, reports on specific transactions, regional and international tax consulting and more. The firm also offers training courses in national taxes, transfer pricing and social security contributions, and publishes weekly bulletins to keep its clients updated on tax changes.
In 2015, partner Enrique Ermoglio and senior manager Ana Mendez assisted in the merger of 12 different legal entities after a share-acquisition deal. The deal had a value of $100 million. In a separate matter, the firm assisted a large taxpayer in a dispute with the tax authorities. The discussion took almost one year and had a favourable outcome for the client.
Estudio Kaplan's team advises clients on tax planning, tax audits and corporate restructuring. The firm works mainly in the real estate, hotels, textile, financial services, agriculture, and transportation sectors. Founder Alfredo Kaplan leads the practice. He has taught at various national and international universities and speaks at international conferences. He is a financial adviser to the Association of Private Promoters of Construction.
Martha Roca leads EY's practice in Uruguay. The team performs advisory, international consulting, global trade, compliance, dispute, tax policy, and transfer pricing services for its clients.
Ferrere's well-regarded tax department offers tax expertise, sophisticated tax structures and tax litigation. Its tax department comprises 10 lawyers and 41 accountants. The professionals are experienced in complex tax matters relating to Uruguay's energy and natural resources sector. Ferrere is also the only law firm in Uruguay that has developed a customs law practice, and counts among its clients many multinationals such as Nike, McCain, IBM, Abbott, Herbalife, NUVO, Diageo and Biogen.
Gianni Gutiérrez leads the team. His expertise ranges from structuring the tax aspects of M&A and financial products to personal wealth planning, and he has successfully led the defense in some of the most significant disputes initiated by the Uruguayan tax authorities.
Over the past year, the firm advised a helicopter services company on the design of the tax and regulatory structure for rendering transport services to a foreign oil company. The firm has also handled 90 tax litigation cases in the past four years, with a 96% success rate.
Juan Federico Fischer and Juan Ignacio Troccoli lead the tax and accounting practice at Fischer & Schickendantz. The firm provides permanent advice and follow-up on business transactions to ensure tax-efficient solutions, and assists clients in tax planning before and after setting up a business, determining the best incorporation option. It also has vast experience assisting clients in obtaining tax breaks under Uruguay's tax-break regulation.
The firm's team of four partners and three other tax professionals advises clients in various industries, including agriculture, mining, retail, food and beverage, and transportation.
The firm is advising a client on various issues of the start-up of headquarters activities in Uruguay, including the purchase of a property.
The Uruguayan branch of Grant Thornton has two partners and 21 other tax professionals. The firm provides a wide range of tax services, including transfer pricing, international tax and tax planning. Several clients described their experience with the firm, led by Nicolás Juan, as "very good".
In December 2015, the firm advised a client on corporate tax exemptions regarding a setup of business in Uruguay. In May 2016, the firm advised a large fishing company in an analysis of the applicability of the VAT in the sale of a business. The firm advises companies from sectors such as food, FMCG and agriculture, manufacturing, TMT, healthcare, financial services, energy and utilities, transport and computers, software, online and digital.
Guyer & Regules has one of the best tax departments in Uruguay, and advises on all tax matters. The multidisciplinary tax team, led by Juan Manuel Albacete, comprises five partners and 48 other professionals. The firm's advice includes tax planning, tax advice, tax audits, advice on M&A and restructurings, tax compliance, transfer pricing, business tax diagnosis and outsourcing.
The firm advises companies in sectors such as financial services, food, fast-moving consumer goods (FMCG) and agriculture, energy and utilities, technology, media and telecommunications (TMT), computers, software, online and digital. The firm has assisted in many important deals in the banking sector, energy and gas and oil industries, among others.
The firm is advising John Deere in the financing structure for the sale of its machinery in Uruguay, as well as assessing whether there should be a permanent establishment in the country.
The firm is also assisting Total and Tullow Oil in several tax mandates related to a competitive bidding for the search for oil in Uruguay. The matter included creating the safest and most efficient tax structure for the bidding and compliance of the contract.
"Solid knowledge of the matter, plus experience, pragmatism and reputation," said one client. Another client said the firm's practitioners were "fast and efficient doing their work".
Gustavo Melgendler leads the tax department at KPMG, which has been operating in Uruguay for more than 60 years. The firm's specialised accountants and lawyers provide services within all areas of taxation to national and international companies. Melgendler's team of six practitioners provides consulting, advisory, litigation and transfer pricing services. The firm reports that its litigation group has a track record of 95% favourable decisions for its clients.
Melgendler and director of tax and legal services Luis Aisenberg is advising a leading multinational online transportation network company on market entry to Uruguay. Most of the tax issues involved were not specifically regulated for the digital economy and required extensive analysis and creative solutions.
Clients of the firm work in sectors including the financial services, manufacturing, TMT, energy and utilities and food, FMCG and agriculture.
"KPMG is the best firm [in the tax area] in Uruguay," said one client.
Melgendler focuses his practice on tax consulting. He is also a professor of law.
Posadas, Posadas & Vecino is a full-service tax firm. It provides litigation, tax, accounting and auditing services. Its tax and accounting practice is led by Daniel González. He advises both local and multinational companies on planning and restructuring, and has worked on important M&A deals. Luis Nin leads litigation and legal consulting. He has extensive experience representing multinational companies in business, labour and civil disputes, and has advised important clients in mining, maritime and aviation, civil, commercial and labour matters.
PwC's tax team offers advice on national taxes, departmental and social security contributions, international taxation, tax inspections, preparation and review of tax returns, transfer pricing, local and international tax planning, and tax due diligence. PwC's practitioners are also experienced in tax litigation and corporate law.
Gabriela Montaldo leads the corporate and tax departments at RSM Unity, which provides tax auditing, planning, analysis and legal advisory services to local and international clients in the public and private sectors. The firm also assists with the negotiation of agreements. Montaldo has many years of experience providing tax and corporate advice to national and international clients
Co-founder Félix Abadi Pilosof leads the tax team at Rueda Abadi Pereira Consultores. The team works with clients in the agriculture, forestry, energy and leather industries, as well as with public offices and institutions.
The firm offers services such as litigation and arbitration, tax, accounting, consultancy and transfer pricing services. Abadi advises on tax, finance and accounting issues in Uruguay and abroad, and has experience advising societies and foreign investments.
|Tier 1 - Uruguay|
|Guyer & Regules|
|Tier 2 - Uruguay|
|Posadas, Posadas & Vecino|
|Posadas, Posadas & Vecino|
|Rueda Abadi Pereira Consultores|
|Tier 3 - Uruguay|
|Arcia Storace Fuentes Medina Abogados|
|Brum Costa Abogados|
|Tier 4 - Uruguay|
|Fischer & Schickendantz|