Regulatory updates - Uruguay

On January 8, 2025, the Ministry of Economy presented a personalized VAT proposal, developed and financed by the Interamerican Development Bank (BID) in 2022.

Currently, Uruguay's standard VAT rate is 22%, with a reduced rate of 10% for necessities such as medicine and land transport and an exemption for essential products, such as milk and water.

The three pillars of the proposal

The principles of personalized VAT regime consist of the following three pillars:

• Expanding the tax base: reducing or eliminating VAT exemptions;
• Single VAT rate: possibility of establishing a uniform VAT rate of 21%;
• Reimbursement to the most vulnerable: electronic reimbursement to the 30% of the population with the lowest income.

Further considerations for the reform

There are several points and challenges to consider to implement this reform successfully, i.a.:

• All transactions must be recorded electronically to ensure that customized rates are applied correctly and to prevent fraud;
• Businesses need e-invoicing systems capable of interacting with tax databases in real time to apply the appropriate rate;
• Businesses will manage large volumes of personal data and would need to have security in place to prevent privacy breaches;
• Adapting technological and administrative systems, which might be costly and challenging for smaller businesses that lack resources;
• The consumer must be identified at the point of sale in real time. Each consumer must be registered with a tax identification number linked to their economic profile.
• Refund would need to be done via Tax identification cards, mobile applications, or electronic payments;
• Some resistance could stem from the customers’ perspective toward a system that requires a record of income or spending habits;
• A customized system could be highly complex for the VAT administration.

If the regime continues developing and is implemented, Uruguay will become one of the first countries to implement such a VAT regime.

Previously, DGI published CFE format version 23.1, which was supposed to become mandatory on the same date. However, all updates made in that format are also provided in the newest version.

The main changes in this new CFE format are indicator 16 validation texts for elements b-C4 and D-C7, which have been modified.

You can learn more about the new CFE format and its technical specifications here.

From 31 October 2021, CFE (Sp.: Comprobante Fiscal Electrónico – an umbrella term for tax-related e-documents) format version 22.2 is mandatory. Version 21 of the CFE is no longer valid since that date.

Key changes of the format

The major updates from version 21 to version 22 are summarised below:

• New mandatory components, such as identification of the recipient: name or company name, address and city;
• Department and country of the recipient;
• New validations in Sales Mode (80 - TAX-FREE Regime) and other changes to export invoices for goods and services;
• Additional labelling for electronic tickets when issued for goods and services considered Professional Secret.

Other improvements and adjustments

A new document type, 7 = NIFE, was included in the Registry of Mandates. Furthermore, it is possible to send it via web service.

More information on the formats and their technical specifications can be found on the DGI website (available in Spanish).

The previous Resolution 168/2021 implied that issuers of e-invoices had to update the information already declared to DGI. Specifically, taxpayers had to state the software used for the issuance of electronic documents and archiving, and indicate the provider for each software.

The new Resolution 1174/2021 from 30 July 2021 is available in Spanish here.