Linkedin
Facebook
Email
more
Recently, on September 19, 2024, the agreement between Uruguay and the United States for the exchange of information on tax matters was approved through Law 20,351 09/19/2024. The agreement includes information relevant to both countries regarding the determination, collection, claims, investigation or prosecution of cases in tax matters.
What taxes does the agreement include?
In the case of Uruguay they are:
Tax on income from economic activities (IRAE)
Personal income tax (IRPF)
Non-resident income tax (IRNR)
Social security assistance tax (IASS)
Wealth tax (IPAT)
Value added tax (VAT)
Internal specific tax (IMESI) and;
any other national taxes imposed by Uruguay after the date of signing the Agreement in addition to, or instead of, the aforementioned taxes.
And in the case of the United States they are:
Federal income taxes
Federal taxes related to employment and self-employment
Federal estate and gift taxes
Federal excise taxes and;
any other federal taxes imposed after the signing of this Agreement or in lieu of the taxes mentioned in the previous clauses.
How does the exchange of information work?
There are three ways in which a country can request information from the counterparty.
On the one hand, the exchange upon request, through which the authority of the requesting party must specify the identity of the person or group under investigation, send a statement with the details of the information requested, the period for which the information is requested , the subject and the reasons why it is considered relevant information for the party requesting it.
Likewise, a declaration is requested from the requesting party that the request complies with the legislation of its country and, among other aspects, that it is in accordance with this agreement. The requesting party must also declare that it has used all means available in its country to obtain the aforementioned information.
Each party must ensure that its competent authority has and provides the other party with the following information:
Information held by banks, other financial institutions, designated agents and fiduciaries
Information on the ownership of companies, associations, trusts, foundations; as well as the chain of ownership. In the case of trusts, information about settlors, trustees and beneficiaries and in the case of foundations, information about founders, members of the foundation board and beneficiaries.
This does not include listed companies or public collective investment funds or schemes.
On the other hand, automatic exchange is established, which is subject to the determination of the competent authorities of the parties as to what information would be exchanged in this way and how it would be carried out.
Finally, the spontaneous exchange of information is established, through which the authority of a party can send information spontaneously if it considers that it is important for the purposes of this Agreement, for the party that receives it. The competent authorities will determine how this exchange will be carried out.
In cases of automatic and spontaneous exchange, additional regulation will be necessary for them to operate.
All requests for information will be made specifically and do not apply generically.
Does the agreement contemplate tax inspections abroad?
Yes, a party may permit representatives of the other party to be present at an inspection of the first-mentioned party, as well as to interview persons and examine records of the first-mentioned party, with the consent of the persons concerned.
Is it possible to deny a request for information?
The requested party is not obliged to obtain and provide information that the requesting party could not obtain under its own legislation, as well as in cases where the request is not in accordance with this agreement.
In cases where the requesting party has not exhausted all means available in its country to obtain the information, the requested party may refuse to provide assistance.
This agreement does not obligate a party to obtain or provide information that reveals commercial, business, industrial secrets or a business process.
Nor does it require the disclosure of confidential information, or information that would be contrary to public order.
On the contrary, a request for information will not be denied because there is a controversy regarding the tax claim that gives rise to the request, nor in the event that the limitation period has expired in the requested part. In the latter case, the limitation period of the requesting party on the taxes to which the agreement applies must be taken into account.
When does this agreement come into force?
Once Uruguay completes its internal procedures for entry into force, it must notify the United States in writing, and one month after receiving the notification, the agreement begins to take effect. Uruguay does not have a deadline for this.
