Worldwide transfer pricing reference guide 2014

Uruguay
Taxing authority and tax law
Taxing authority: General Tax Direction (Dirección Nacional Impositiva — DGI).
Tax law: Income Tax Law and Regulations.
Relevant regulations and rulings
Transfer pricing documentation requirements have been in effect in Uruguay since 1 July 2007 (following Law #18.803), but they were
not regulated until 26 January 2009 with the publication of Decree #56/009. Additional modifications were made by Decree #392/009.
DGI issued Resolution #2.084/009 on 1 December 2009 (with the modifications introduced by Resolution #819/010 and #2.098/009),
which defined concepts and established requirements for the transfer pricing report.
OECD Guidelines treatment
Uruguay is not an OECD member, and the OECD Guidelines are not mentioned in Uruguay’s Income Tax Law and Regulations. As transfer
pricing practice is relatively new in Uruguay, there is no background on the treatment that is given to OECD Guidelines.
Priorities/pricing methods
The law establishes that in order to determine the market value, one of the following methods should be applied: CUP, Resale Price,
Cost Plus, Profit Split and TNMM. For the application of the transfer pricing methods, the comparability analysis and justification for such
prices may be performed on the local or foreign party as the tested party. If the foreign party is the tested party, certified documented
evidence will be required in the country of origin, issued by a firm of well-known independent auditors, duly translated and authenticated.
Uruguayan law does not prioritize methods. However, for transactions involving imports or exports of goods with well-known prices in
transparent markets, those prices must be used. If the transactions are performed through international intermediaries who are not the
final consignees of the goods, the applicable price is the price in the respective market. The price to be used is the one in the respective
market on the day of the shipment or, if it was registered in the Mercantile Office, the price on the day of the contract.
Transfer pricing penalties
The penalty for those who breach the formal requirements established in the transfer pricing framework (i.e., fail to timely file a transfer
pricing report and tax return) will be applied on a graduated scale, in accordance with the severity of the breach. The maximum fine could
amount to up to approximately US$230,000.
When there is an underpayment due to transfer pricing, the taxpayer is penalized with a tax omission fine that is 5% of the amount of the
underpayment, if it is paid before the fifth day after the deadline, 10% if it is paid between the fifth and 90 th day after the deadline, and
20% if it is paid 90 days past the deadline. In each case, corresponding surcharges are added.
It is important to note that if the DGI requires the transfer pricing study and a company does not file it, the DGI can suspend the
certificate that shows that the taxpayer fulfilled its tax obligations. The immediate consequence of this is that it bars the taxpayer from
being able to import goods or obtain a bank loan.
Penalty relief
There are currently no provisions for reductions in penalties.
Documentation requirements
Only those taxpayers that fall under one of the following categories are obliged to file the transfer pricing study and the transfer pricing
annual return (Form 3001) with the tax authorities:
• The total amount of the taxpayer’s transaction(s) subject to the transfer pricing rules is higher than 50 million indexed units
(approximately US$6.5 million)
• The DGI requests that the taxpayer file the report and the information return
However, all companies who have dealings with related companies must prepare a transfer pricing study.
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