Uruguay’s tax authorities issued Resolution No. 1,716, expanding the corporate income tax exemption for income from software development services.

Under the general regime, income derived from software development services is exempt from corporate income tax, provided, among other things, that more than 50% of the direct costs and expenses necessary to render the software services is incurred in Uruguay.

The Resolution expands the corporate income tax exemption for income from software development services by allowing 30% of the direct costs and expenses incurred outside Uruguay to be treated as incurred in Uruguay. This benefit applies only to tax years beginning from 1 January 2020 to 31 December 2020.

The Resolution requires software providers to meet certain requirements to claim the exemption.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young Uruguay, Montevideo

• Martha Roca | martha.roca@uy.ey.com
• María Inés Eibe | ines.eibe@uy.ey.com
• Nadine Bruck | nadine.bruck@uy.ey.com

Ernst & Young LLP (United States), Latin American Business Center, New York

• Ana Mingramm | ana.mingramm@ey.com
• Pablo Wejcman | pablo.wejcman@ey.com
• Enrique Perez Grovas | enrique.perezgrovas@ey.com

Ernst & Young Abogados, Latin American Business Center, Madrid

• Jaime Vargas | jaime.vargas.c@es.ey.com

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

• Lourdes Libreros | lourdes.libreros@uk.ey.com

Ernst & Young Tax Co., Latin America Tax Desk, Tokyo

• Raul Moreno | raul.moreno@jp.ey.com

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