Uruguay
This chapter describes and assesses corporate taxation in Uruguay with a focus on tax incentives. Tax incentives in Uruguay are used extensively and vary across investments depending on where, when and by whom an investment is made in the country. The chapter first provides an overview on tax revenues and the corporate tax system in Uruguay. It then provides a description and an assessment of the country's tax incentives regime for investment. Two following sections further discuss the use and governance of tax incentives in Uruguay, providing specific policy recommendations on how to enhance the use and governance of tax incentives in alignment with investment and tax policy objectives.
Uruguay's domestic legal framework provides protection for investors consistent with an open and modern policy regime for investment. This chapter provides an overview of provisions in both domestic legislation and Uruguay's international investment agreements offering protections for investors. It looks into the rules of expropriation, contract enforcement and dispute settlement as well as the regimes for intellectual property rights. It also reviews Uruguay's international investment treaty practice and its legal framework for investor-state dispute settlement.
The chapter reviews investment promotion and facilitation policy in Uruguay. It first provides an overview of the overall institutional and regulatory framework, including those regulating investment incentives. It also analyses the activities of the national investment promotion agency, Uruguay XXI, and benchmarks via-à-vis agencies in the OECD economies. Finally, it assesses the country’s investment facilitation and administrative simplification efforts and identifies possible improvements in the area of regulatory quality. It concludes with key policy recommendations.
Uruguay is a relatively small, high-income and fast-growing economy. Policy-makers have worked toward the objective of gradually integrating Uruguay into the global economy, strengthening and cementing democratic institutions and improving the overall well-being of the local population. This policy coupled with lack of formal restrictions on activities of foreign enterprises have led to high levels of foreign direct investment (FDI) in the economy. This chapter presents Uruguay’s situation in terms of its overall economic performance and FDI trends over the past two decades to provide key insights on the role – and evolution – of foreign investment in the Uruguayan economy.
This chapter documents the overall development context in Uruguay, describing the current economic situation and the main investment policy reform efforts, and identifies specific challenges that hinder investment, economic growth, and well-being. It summarises the key findings in each policy area covered by the Review and provides tailored recommendations.
Efficient management of state-owned enterprises (SOEs) and reform of the public administration can be a crucial element of future political and economic reforms in Uruguay. This chapter reviews recent reforms to increase oversight of and transparency in the use of resources by SOEs in Uruguay. It also discusses the progress in encouraging private participation in infrastructure projects. Finally, it reviews overall progress in public administration reforms, including to prevent misconduct in the public sector, fight corruption and minimise the risk of undue relations with business.
In the past three decades, successive governments of Uruguay have declared and proven their long-term commitment to political and economic stability, in a regional environment characterised by strong volatility. The country has consistently scored highly on metrics of quality of democratic processes, transparency and control of corruption. Building on these achievements, Uruguay has also led a stable and prudent macroeconomic policy, and maintained high trade and investment openness.
Fisheries: Commercial fishing and aquaculture performed in internal waters and in the territorial sea within a distance of 12 miles, measured from the base lines, are reserved exclusively to licensed Uruguayan-flagged vessels.
Responsible Business Conduct (RBC) is a key element of a healthy business environment – one that attracts quality investment, minimises risks for businesses, ensures stakeholder rights are respected and ultimately leads to broader value creation. This chapter reviews Uruguay’s policies to promote RBC and their alignment with the OECD Guidelines for Multinational Enterprises. It also summarises Uruguay’s plans for establishing a National Contact Point (NCP), a key mechanism allowing the government to promote and implement the Guidelines and providing a mediation and conciliation platform for resolving practical issues that may arise.
The Investment Policy Review of Uruguay assesses the investment climate in Uruguay and discusses the challenges and opportunities faced by the government. Capitalising on the OECD Policy Framework for Investment, the Review takes a broad approach to investment climate reforms in Uruguay and its continuous transition towards higher levels of development and well-being. Individual chapters are devoted to the overall economic performance and foreign investment trends, the reform of the state and state-owned enterprises, foreign investment regulations, the legal and institutional framework for investment protection, tax policy, investment promotion and facilitation, and policies to promote and enable responsible business conduct (RBC).
Uruguay has long acknowledged the long-term benefits of an open and non-discriminatory international investment environment. As such, the country retains very few restrictions on establishment and operations of foreign-owned enterprises. This chapter examines the openness of Uruguay’s investment regime in relations to barriers to entry of foreign-owned firms and exceptions to national treatment. It also benchmarks the openness of Uruguay’s FDI regulatory regime against OECD and various other emerging economies through the OECD FDI Regulatory Restrictiveness Index, showing the level of openness far above the average encountered in developing countries and even most advanced economies.
Uruguay sigue destacándose en América Latina y el Caribe (ALC) con respecto al desarrollo de una sociedad y economía digitales inclusivas. El país ha hecho esfuerzos significativos para mejorar el acceso digital de todos sus ciudadanos. Ha aumentado el número de usuarios de Internet y de suscripciones activos a servicios de banda ancha móvil y fija en la última década. Uruguay mejoró en el índice de desarrollo de gobierno electrónico del 0.56 en 2008 al 0.79 en 2018, una evolución superior al promedio de ALC (0.65) pero inferior al promedio de la OCDE (0.82). El índice de comercio electrónico B2C de la UNCTAD indica que el apoyo de la economía a las compras por Internet sigue estando por encima del promedio de ALC. Este resultado positivo se atribuye en parte al desarrollo de la banca digital en el país.
Uruguay can legally issue the following type of ruling within the scope of the transparency framework: cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles