Online companies incorporated abroad (with no presence in Uruguay) are required to pay taxes in Uruguay whenever their clients are located within Uruguayan territory.
Online services providers (such as Netflix and Spotify) are subject to VAT at the rate of 22%, plus Non-Residents Income Tax (so-called IRNR) at the rate of 12%, both assessed over the sales price. Online services intermediaries (such as Uber and Airbnb) are subject to the same taxes, except that IRNR is assessed only over 50% of their sales where one of the parties of the ultimate transaction is based abroad.
A recently enacted decree introduced the following innovations:
1. The above taxation will only apply to online companies engaged in the transmission of audiovisual contents. These are broadly defined as any contents based on sounds, images or moving images (either combined or separated).
2. Clients are deemed to be located in Uruguay where any of the following requirements are met: (i) the IP address of the computer, cell phone or relevant device, is located in Uruguay, (ii) the billing address is located in Uruguay, or (iii) the credit card to be used, is administered by a Uruguayan financial institution.
3. Where just one of the ultimate transaction parties is based in Uruguay (whether the supplier or the end-user), VAT would be only assessed over a reduced tax base of 50% of the sales.