Uruguay has a special tax regime designed to encourage the development and export of software and technology services. This regime allows access to partial or total exemptions from Income Tax on Economic Activities (IRAE) and exemption from Value Added Tax (VAT) in certain cases.
The main objective is to promote the establishment of technology companies with real activity in the country, in line with the international standards of fiscal transparency defined by the OECD.
The software in question must be duly registered in Uruguay with the National Directorate of Industrial Property (DNPI), and the owner company must submit an annual affidavit to the General Tax Directorate (DGI).
In summary, companies that develop software wholly or partially in Uruguay can significantly reduce their IRAE tax burden in proportion to local development, while maintaining efficient profitability and complying with the economic substance requirements of international regulations.
For further information, please contact Ricardo Pittaluga at ricardo@pittaluga.com.
