Uruguay, as part of its commitment to global tax transparency and in line with the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13, has introduced Country-by-Country Reporting (CbCR) requirements for multinational enterprise (MNE) groups. The CbCR regime in Uruguay aims to enhance transparency by ensuring that tax authorities have access to detailed information about MNEs’ operations across various jurisdictions. This guide provides an overview of the CbCR obligations in Uruguay, detailing who is affected, reporting requirements, submission procedures, and the penalties for non-compliance.

Applicability of CbCR in Uruguay

Criteria for Reporting:

• CbCR obligations apply to multinational enterprise (MNE) groups that meet the following criteria:
  • The MNE group’s consolidated revenue exceeds 33.85 billion Uruguayan peso during the preceding fiscal year.
  • The ultimate parent entity (UPE) is a tax resident of Uruguay.
  • If the UPE is not a resident in Uruguay, a constituent entity in Uruguay may be required to submit the CbC report if:
    • The UPE’s jurisdiction does not require CbCR,
    • The UPE’s jurisdiction does not have an agreement with Uruguay for the exchange of CbC reports, or
    • There is a failure in the automatic exchange of CbC reports between Uruguay and the UPE’s jurisdiction.

Relevant Legislation:

• Uruguay’s CbCR requirements are regulated by Decree No. 353/018, which establishes the obligations under BEPS Action 13.
• The General Tax Directorate (Dirección General Impositiva, DGI) oversees the implementation and compliance of CbCR rules in Uruguay.

Reporting Requirements

Information to be Reported:

• The CbC report must include detailed information on each constituent entity of the MNE group, broken down by tax jurisdiction. The report must cover:
  • Revenue (distinguishing between related and unrelated party revenues),
  • Profit or loss before tax,
  • Income tax paid and accrued,
  • Capital and accumulated earnings,
  • Number of employees,
  • Tangible assets other than cash and cash equivalents.
• The report must also include a list of all constituent entities, their jurisdictions of tax residence, and a description of their main business activities.

Form and Submission:

• The CbC report must be submitted in OECD XML schema format to ensure compliance with international standards.
• Filing is done electronically through the DGI’s online system. More details on the submission process can be found on the DGI’s official website: DGI – CbCR.

Filing Deadlines

• The CbC report must be submitted within 12 months after the last day of the fiscal year of the MNE group. For example, if the fiscal year ends on 31 December 2023, the report must be submitted by 31 December 2024.
• Constituent entities of an MNE group in Uruguay must also notify the DGI of the identity and jurisdiction of the reporting entity (whether it is the UPE or a surrogate parent entity) by the last day of the fiscal year.

Penalties for Non-Compliance

Penalties:

• Uruguay imposes financial penalties for non-compliance with CbCR obligations. Key penalties include:
  • A fine of up to 1,000,000 UI (approx. USD 150,000) for failure to submit the CbC report on time.
  • Additional fines may be imposed for failure to notify the authorities of the reporting entity or for submitting incomplete or inaccurate information.
  • Repeated violations or significant discrepancies can result in higher fines or additional penalties imposed by the DGI.

Defences:

• MNEs can appeal against penalties if they provide reasonable justification for the non-compliance, such as technical difficulties or unforeseen circumstances. However, businesses are encouraged to have robust systems in place to ensure compliance.

Confidentiality and Use of Information

Data Protection:

• CbC reports submitted to the DGI are treated as confidential and used exclusively for tax risk assessment purposes.
• Uruguay participates in automatic exchange of information agreements with other jurisdictions under the OECD’s framework. CbC reports are shared only with jurisdictions that have signed appropriate exchange agreements and meet the OECD’s standards for confidentiality and data protection.