Transfer Pricing in Uruguay

The legal framework

Uruguay's transfer pricing regime occupies one chapter of the corporate income tax statute and has changed remarkably little since 2007. Chapter VIII of Título 4 of the Texto Ordenado 2023, articles 46 to 58, is the whole of it — articles 46 to 56 carry the substantive rules, article 57 the penalty for breach of transfer pricing formal duties and article 58 the joint liability of free-zone users, with Chapter IX opening at article 59. Decreto N° 101/024 of 4 April 2024 approved the T.O. 2023 and, in its article 3, provides that pre-2024 references to the T.O. 1996 read as references to the corresponding T.O. 2023 articles; decrees and resolutions still use the old numbering.

Article 46 frames the standard in domestic rather than OECD language. Dealings between an IRAE taxpayer and related parties count as agreed between independents where their consideration and conditions conform to normal market practice, prácticas normales del mercado. Where they do not, the same article leaves it to the Dirección General Impositiva to establish that fact. Relatedness under article 47 is functional — direction or control by the same persons, or decision-making power derived from capital, creditor rights, functional or contractual influence — with no shareholding percentage anywhere in the text.

Article 48 removes the argument entirely for some counterparties. Transactions with entities in low- or nil-taxation jurisdictions, or benefiting from such a regime, are presumed without proof to the contrary both to be related-party dealings and not to conform to market practice. The list in force is Resolución DGI N° 3034/024, thirty-two jurisdictions, from 1 January 2025. It reaches customs enclaves, which is how the free zones come in: there is no domestic-to-domestic regime, yet a Montevideo company dealing with a free-zone affiliate sits inside Chapter VIII. The OECD Guidelines are adopted by no statute or decree — the interpretive reference in practice, binding on no one, with no DGI statement of which edition applies.

Methods, comparables and benchmarking

Article 49 lists the five OECD methods and applies the most-appropriate-method test with no hierarchy. Two commodity rules override it. Article 50 requires the quoted public price for imports and exports of goods traded on transparent markets, subject to proof to the contrary, related counterparty or not. Article 51 is the sixth method: where a foreign intermediary is interposed in a trade of quoted or agricultural goods, the CUP applies at the shipment-date quotation unless the intermediary cumulatively proves real substance and a commercial establishment where it is resident, a principal activity that is neither passive income nor intermediating goods to or from Uruguay, and related-party dealings under 30% of its annual transactions. Those tests need evidencing every year, not once at structuring.

Benchmarking mechanics are prescriptive. Article 8 of Decreto N° 56/009 requires the median and interquartile range wherever two or more comparables exist. Inside the range the tested result stands; outside it, Uruguay adjusts neither to the median nor to the nearest quartile, but to the median less 5% below the first quartile and the median plus 5% above the third. The closing paragraph of article 8 widens the acceptable range rather than capping the adjustment: where the first quartile is higher than the median less 5%, that lower figure replaces the first quartile, and where the third quartile is lower than the median plus 5%, that higher figure replaces the third quartile.

Article 5 allows either party to be tested, but a foreign tested party requires evidence certified in its country of origin by an independent auditor of recognised standing, translated and legalised — hence the Uruguayan entity is tested in most studies. No legal preference exists between local and foreign comparables, though article 6 makes geographic market an express comparability factor. The Tribunal de lo Contencioso Administrativo supplied the preference the legislator withheld: in Sentencia N° 597/2021 it upheld DGI's rejection of an automotive distributor's international database set, which had swept in technology and electronics companies, and faulted its shifting screening criteria between years. There is no dedicated guidance on intangibles, services, financial transactions or cost contribution arrangements, and nothing implementing Amount B; the general chapter, the articles 30 and 31 deductibility limits — the regla candado and the proportional deduction, which bite on royalties and interest — and the substance-over-form rule in article 6 of the Código Tributario carry the load.

Documentation: what DGI expects

Annual compliance turns on numeral 10 of Resolución DGI N° 2084/009: a taxpayer inside the regime files where any of three triggers is met — membership of the Large Taxpayers Division, covered transactions exceeding UI 50,000,000 in the period, or notification by DGI. Note that IMPO's consolidated text still shows UI 10,000,000; Resolución DGI N° 2098/009 substituted the higher figure. The threshold is in indexed units, so any euro equivalent drifts with both the index and the exchange rate.

The package is three documents: the sworn declaration on Formulario 3001, prepared in DGI's SIGMA application and filed through the web portal; the financial statements, where not otherwise lodged; and the Estudio de Precios de Transferencia, Uruguay's local file in all but name, which predates BEPS Action 13. Numeral 11 fixes the study's minimum content in thirteen lettered elements, a) to m) — activities and functions; risks assumed and assets used; the elements, documentation, circumstances and facts valued; each transaction detailed and quantified; the counterparties identified; the method and its reasons, including why the others were discarded; each comparable selected; the sources of the comparables data; comparables rejected, with reasons; adjustments quantified with their methodology; the median and interquartile range; the comparables' business activity; and conclusions. A closing paragraph applies article 5 of Decreto N° 56/009 where a foreign entity is the tested party. All of it in Spanish, in the ninth month from year end, on the date set by DGI's calendar by taxpayer group and last RUT digit.

Below the thresholds the filing obligation falls away but the substantive one does not: numeral 13 requires documentation of how prices were set and which comparison criteria were used, held for the whole prescription period.

Master file and Country-by-Country reporting run on a different threshold and clock. Both come from articles 55 and 56 and Decreto N° 353/018, catch constituent entities of groups with consolidated revenue of EUR 750,000,000 or more, and fall due within twelve months of the reporting year end. Resolución DGI N° 94/019 adds an annual notification before the group's year end. No resolution prescribes a submission format for the master file itself — an open procedural point.

Audits, penalties and the enforcement climate

Uruguay does have a bespoke transfer pricing penalty, and it is severe. Article 57 of Título 4, sourced to article 315 of Ley N° 18.996, provides that whoever breaches any formal duty of the transfer pricing regime or its regulations is sanctioned on a graduated basis, by gravity and the circumstances in article 100 of the Código Tributario, under the fine regime in the fourth paragraph of article 469 of Ley N° 17.930 as amended by Ley N° 18.083 — up to one thousand times the maximum contravención fine. Failure to file the return, the study, the master file or the CbC report lands there. The general contravención of article 95, currently $2,000 to $200,000 pesos and updated annually by the Executive under article 99, and the mora surcharges and interest of article 94, apply only residually.

A primary adjustment produces additional IRAE plus mora surcharges and interest. Where DGI establishes fraud, article 96 applies defraudación at one to fifteen times the tax defrauded, and intent is presumed, rebuttably, where the return contradicts its supporting documentation, where record-keeping duties are breached, or where required documentation is missing. An absent or internally inconsistent study is precisely that fact pattern.

No documentation-based penalty protection exists; the protection is evidentiary. Article 46 leaves DGI to prove departure from market practice, and a contemporaneous, consistent study is what rebuts the article 96 presumptions.

The climate is hardening. DGI's Plan Estratégico de Gestión 2025-2029 puts IRAE evasion at 48.9% for 2024 against 20.7% for VAT and targets a 20% relative reduction in both by 2029, on a risk-based model using artificial intelligence and advanced data analysis. Only two transfer pricing judgments of note exist, the first roughly a decade after the rules began. Audit experience is thinner than the statute's age suggests, and that is changing.

Dispute resolution and advance certainty

Advance pricing agreements exist and are underused. Article 53 of Título 4 empowers the regime; article 15-BIS of Decreto N° 56/009, inserted in 2009 and extended in 2017, is the operative rule. Two features shape the decision: the agreement must be signed before the covered transactions occur, so there is no rollback to open years, and it may not exceed three fiscal years. Bilateral and multilateral APAs are legally enabled — by the third paragraph of article 53 and the second paragraph of article 15-BIS, within ratified treaties — but no operational programme sits behind them: Uruguay reports to the OECD that bilateral APA programmes are not implemented, with no roll-back, no filing timelines, no published access rules or documentation requirements, no fees and no statistics.

Mutual agreement procedure runs under the article 25 equivalent in every Uruguayan double tax convention, eight of which carry arbitration, reinforced by the Multilateral Instrument ratified by Ley N° 19.814. The Action 14 peer review, run in 2024 under the simplified modality and approved on 18 November 2024 as compliant, rested on an inventory of two cases, one closed. MAP is live on paper and untested in practice — build the treaty position into the file at the outset rather than assuming a competent authority fix later.

An assessment must first be challenged administratively. Under article 43 of the Código Contencioso Administrativo approved by Ley N° 20.333 of 11 September 2024, the recurso de revocación goes to the issuing body within ten working days of notification, filed jointly with the recurso jerárquico where applicable. Ten working days is short: the file must be ready before the resolution lands. Only once that route is exhausted can annulment be sought from the Tribunal de lo Contencioso Administrativo.

Pillar Two and what changes in 2026

Uruguay legislated Pillar Two at the end of 2025. The Impuesto Mínimo Complementario Doméstico was created by article 665 of Ley N° 20.446, the Presupuesto Nacional 2025-2029 promulgated on 16 December 2025, which inserts it into the T.O. 2023 as Título 21. Article 666 does something narrower — it directs the Executive to reconcile the statutory tax-stability regimes with the article 665 tax, and that is what Decreto N° 325/025, promulgated 29 December 2025 and published 12 January 2026, implements. The tax catches entities constituted in Uruguay within groups reporting consolidated revenue of EUR 750,000,000 or more in at least two of the four immediately preceding fiscal years, taxing the shortfall where the jurisdictional effective rate falls below 15%, with top-up allocated among Uruguayan constituent entities in proportion to qualifying income, from fiscal years beginning in 2025. Only a domestic top-up tax was enacted — articles 73 and 74 treat the IIR and UTPR as Inclusive Framework rules Uruguay has not adopted — and whether the IMCD qualifies as a DMTT for OECD safe harbour purposes is unsettled.

The transfer pricing consequence is indirect but real. A regime with generous promotional and free-zone treatment now has a floor, and the figures deciding whether it bites — where profit sits, which entity books it, how covered taxes fall — are the figures the transfer pricing file produces. Groups using free zones for principal or IP-holding functions should expect benchmarking and GloBE computation to be read together. Beyond the IMCD, no substantive change to methods, thresholds or documentation rules was made in 2024, 2025 or 2026 to date.

How practitioners should respond

Four priorities follow. Fix the citations: work drafted now should cite T.O. 2023 numbering with the T.O. 1996 equivalents in parentheses, because the decrees and resolutions still use the old set. Second, build the comparable set with Sentencia N° 597/2021 in view: where credible Uruguayan or regional comparables exist, a global database screen invites substitution, and shifting screening criteria between years reads as result-driven selection. Document the search strategy and every rejection, and keep criteria stable.

Third, treat the documentation calendar as two calendars: Formulario 3001 in the ninth month, master file and CbC report in the twelfth, CbC notification before the group's year end. Miss any of them and the exposure is not the ordinary contravención but the article 57 sanction, graduated up to a thousand times the maximum contravención fine. Fourth, take the article 8 arithmetic seriously at pricing stage rather than at filing: because an out-of-range result is adjusted to a statutory band around the median rather than the nearest edge of the range, landing marginally outside is disproportionately expensive.

Underneath all of it is the burden question. Article 46 asks DGI to establish that conditions departed from market practice; article 96 presumes fraudulent intent where documentation is missing or contradicts the return. A complete, internally consistent, contemporaneous study is not a formality — it is the mechanism that keeps the burden where the statute put it.