· 8 min read

Uruguay – Transfer Pricing (2025)

Uruguay’s transfer pricing regime is grounded in Title IV of the Tax Ordinance (Tax Ordinance 1996) and its implementing decrees. The domestic framework explicitly references the arm’s length principle in Article 38 of Title IV. Articles 39 and 40 define related parties and the scope of controlled transactions, while Articles 41, 42 and 43 enumerate the transfer pricing methods allowed. Decree No. 56/009 provides further procedural and comparability guidance, including Articles 6, 7, 8 and 15 bis which expand on practical application and documentation.

Taxpayers subject to the rules include corporate income taxpayers whose transactions are within the scope of Title IV. Two parties are considered related when they are directly or indirectly subject to the management or control of the same individuals or legal entities, or when one party has the power to direct or define the taxpayer’s activities through capital participation, credit rights, functional influence, or any other contractual or non-contractual influence (Art. 39 and 40, Title IV of the Tax Ordinance 1996). Transactions between a permanent establishment (PE) and its head office fall within the transfer pricing rules and a PE is treated as economically independent of its head office for comparability purposes (Art. 39 and 40, Title IV of the Tax Ordinance 1996).

Arm’s length principle and the role of the OECD Guidelines

The arm’s length principle is embedded in domestic law (Art. 38, Title IV, Tax Ordinance 1996) and the OECD Transfer Pricing Guidelines (TPG) serve as a technical reference with a soft law status in Uruguay. Decree No. 56/009 (Art. 6) directs the use of comparability analysis consistent with Chapter III of the OECD TPG, but the TPG does not replace domestic law.

Uruguayan domestic law provides a comprehensive definition of related parties in Articles 39 and 40 of Title IV. Parties are related when subject to common management or control, or when one party can direct or define the activities of another through ownership, credit rights, functional influence or other contractual or non-contractual means (Art. 39 and 40, Title IV of the Tax Ordinance 1996). Transactions with non-residents domiciled, incorporated, or located in jurisdictions with low or nil taxation, or benefiting from special low-tax regimes are treated, under certain detailed regulations, as transactions between related parties without admitting proof to the contrary; the presumption likewise covers entities operating in customs havens (Art. 39 and 40, Title IV of the Tax Ordinance 1996). The rules also address situations involving intermediaries in cross-border trade and their relationship to the ultimate foreign client or provider (Art. 39 and 40, Title IV of the Tax Ordinance 1996).

Methods and selection criteria

Uruguayan law expressly provides for a set of transfer pricing methods equivalent to internationally recognized approaches: Comparable Uncontrolled Price (CUP), Resale Price, Cost Plus, Transactional Net Margin Method (TNMM) and Profit Split, as cited in Articles 41, 42 and 43 of Title IV of the Tax Ordinance 1996. The selection of the transfer pricing method follows the “most appropriate method” standard rather than a rigid hierarchy (Art. 41, Title IV of the Tax Ordinance 1996). Consequently, method selection must be justified based on the factual and economic circumstances of each case.

Comparability and use of ranges

Uruguay follows comparability guidance aligned with Chapter III of the OECD TPG as incorporated in its regulatory framework (Art. 6, Decree No. 56/009). There is no statutory preference for domestic comparables over foreign comparables; both are acceptable depending on the facts and circumstances, and geographic market considerations must be taken into account when performing comparability analyses (Decree No. 56/009). Article 45 of Title IV permits the tax administration to use secret comparables as evidentiary means to justify determined prices, although there is no record of practical use of this power.

Domestic law allows the use of arm’s length ranges and statistical measures. When the application of an accepted method yields two or more comparable transactions, taxpayers and authorities must determine the median and the interquartile range for prices, amounts of consideration or profit margins. If the taxpayer’s reported price, amount or margin falls within the interquartile range, it is deemed to be at arm’s length. If it falls outside the first or third quartile, the law prescribes applying the respective median plus or minus 5% (Art. 8, Decree No. 56/009). Decree No. 56/009 (Art. 7) also explicitly permits comparability adjustments to eliminate differences between controlled and uncontrolled transactions.

Documentation and reporting

Uruguayan law requires transfer pricing documentation when certain thresholds are met. Specifically, taxpayers whose aggregate transactions subject to transfer pricing rules exceed 50 million indexed units (approximately EUR 5.3 million) during the fiscal year, or those notified by the DGI, must file annual information including a sworn declaration detailing amounts and transactions subject to TP rules, a copy of financial statements (if not previously filed), and a transfer pricing documentation report with minimum content equivalent to a local file (Art. 46 and Art. 46 TER, Title IV of the Tax Ordinance 1996; Resolución DGI Nº 2084/2009). The filing deadline is nine months after the fiscal year-end.

All information provided to the tax authorities must be in Spanish; foreign documents must be translated into Spanish and legalized. Country-by-Country Reporting (CbCR) is consistent with BEPS Action 13 and may be filed in English or Spanish. Although legislation contemplates a Master File consistent with Annex I to Chapter V of the OECD TPG, the implementing decree to enforce Master File obligations has not yet been issued.

Specific penalties for transfer pricing documentation and compliance are established in Art. 46 Bis of Title IV. Penalties for non-filing, late filing or incomplete filing of TP documentation and CbCR are graduated based on the severity of the infraction, with fines approximately ranging from EUR 224 to EUR 224,000.

Exemptions and simplification measures

The domestic legislation provides an exemption from the obligation to file the annual transfer pricing information for taxpayers whose aggregate transactions subject to TP rules do not exceed 50 million indexed units (~ EUR 5.3 million) during the fiscal year. Nonetheless, exemption from filing does not exempt taxpayers from complying with the arm’s length principle. The law authorizes the Executive Branch to establish optional notional profit regimes (safe harbours) considering the nature of transactions and business activity; to date, such regimes have not been enacted (Art. 44, Title IV of the Tax Ordinance 1996).

Advance Pricing Agreements and Mutual Agreement Procedures

Uruguay provides for Advance Pricing Agreements (APAs) under domestic law and internal procedures (Art. 44 Bis, Title IV of the Tax Ordinance 1996). APAs can be unilateral, bilateral or multilateral, and the standard duration of an APA is three years from the year following its signature. With respect to Mutual Agreement Procedures (MAPs), Uruguay includes MAP clauses in its double tax treaties and has processes to invoke MAPs, although at the time of the profile the country was still developing internal MAP procedures; Decree No. 56/009 includes Art. 15 bis relevant to MAP coordination and procedures.

Penalties and other considerations

In addition to documentation penalties under Art. 46 Bis, the tax administration can undertake adjustments where transactions are not consistent with the arm’s length principle. Uruguay does not provide for year-end adjustments nor for secondary adjustments under its domestic transfer pricing rules, as indicated in the country profile. The domestic tax system applies a substance-over-form approach, meaning that economic reality governs tax characterization and may lead to re-characterization of transactions when warranted (Art. 19 and Art. 20, Title IV of the Tax Ordinance 1996; Art. 6, Tax Code).

Attribution of profits to permanent establishments

Uruguay has adopted the Authorised OECD Approach (AOA) in two of its tax treaties. The implementation of the AOA in an individual case depends on whether the relevant treaty contains the updated version of Article 7 of the OECD Model Tax Convention (2010 and later). Uruguay can apply the OECD approach in the context of a DTA only if that treaty includes the new Article 7; for other treaties that do not include the updated text, the AOA is not applied under the treaty framework (Uruguay profile, February 2022).

Other relevant rules outside transfer pricing

General limitation rules that affect the tax treatment of intercompany payments, including royalties, services and interest, are contained in Arts. 19 and 20 of Title IV of the Tax Ordinance 1996 and should be considered alongside transfer pricing analyses. Article 6 of the Tax Code is also relevant in assessing tax treatment and procedural matters.

Conclusion

Uruguay’s transfer pricing regime aligns with international practice by recognizing the arm’s length principle in domestic law and by authorizing standard transfer pricing methods. The country applies the “most appropriate method” standard, permits statistical ranges with explicit median and interquartile rules, enforces documentation and reporting above clear thresholds, and imposes graduated penalties for non-compliance. APAs are available with a three-year duration from the year following signature, MAPs are available under treaties and internal procedures continue to be developed, and AOA application for PEs depends on treaty wording. Safe harbours remain a legislative option that has not been implemented, and Uruguay does not currently provide for year-end or secondary adjustments under domestic TP rules.

References

Further information and country profiles are available at the OECD: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html

Share:
Back to OECD
Disclaimer:

La información presentada en este perfil se ha generado tomando como base datos y contenidos publicados por la OCDE. Si bien se busca reflejar fielmente la información disponible, no se garantiza su exactitud ni exhaustividad y se recomienda consultar las fuentes originales de la OCDE para fines oficiales o de investigación.