| Status | Draft Law |
| Law | Draft 2025-2029 Budget Law of August 31, 2025 |
| Effective Date | Proposed to be effective from January 1, 2026 |
| IIR | No |
| UTPR | No |
| QDMTT | Yes |
| Filing Deadlines | Standard |
| Safe Harbours | High-Level |
On August 31, 2025, the Ministry of Economy and Finance sent the Draft Budget Law for the period 2025–2029 to Parliament. This includes a domestic minimum tax (intended to be a QDMTT).
Under Article 5 of the Law, the OECD GloBE Commentary, as well as other OECD guidance such as the Administrative Guidance and Safe Harbour rules are to be used as a source of ‘illustration and interpretation’ for the application of the Law.
GLOBE APPLICATION
General
Whilst the Draft Law uses the same approach as the OECD Model Rules (with the same approach to the effective tax rate calculation, jurisdictional blending and GloBE income/Adjusted Covered Tax adjustments), as the Draft Law only provides for the DMTT (and not an IIR or UTPR), it is specifically tailored to Uruguay’s domestic tax regime with a number of elements in the general GloBE rules not applicable for DMTT purposes.
Article 74 of the Draft Law states that it is intended to be compatible with the OECD Model Rules and Guidance and the Government intends to apply the Law so that it is implemented and administered in a manner that is consistent OECD rules.
It also notes that the Government will suspend the tax if the GloBE rules are repealed or suspended by the OECD.
As noted below, very few aspects of the OECD Administrative Guidance are included in the Draft Law.
Administrative Guidance
The only aspect of the OECD Administrative Guidance included in the Draft Law is the provision for Restricted Tier 1 Capital (Article 3.3 of the February 2023 OECD Administrative Guidance).
Safe Harbour and Penalty Relief Guidance
Article 72 of the Draft Law provides for Safe Harbour exclusions but states that the specific details of the Safe Harbours will be provided by Government.
Article 74 of the Draft Law also provides that the Government will exempt or exclude from the DMTT those constituent entities located in Uruguay that are part of a multinational group whose ultimate parent entity is located in a jurisdiction that has been exempted or excluded from the IIR/UTPR under the OECD GloBE Rules.
ELECTIONS
Elections in the OECD Model Rules
The elections included in the OECD Model Rules that are provided in the Draft Law, include:
-Excluded Entity Election (Article 7 of the Draft Law)
-Stock-Based Compensation Election (Article 27 of the Draft Law)
-Election to use the Realization Method (Article 30 of the Draft Law)
-Election to Spread Capital Gains (Article 31 of the Draft Law)
-Consolidation Election (Article 33 of the Draft Law)
-Unclaimed Accrual Election (Article 49 of the Draft Law)
-GloBE Loss Election (Article 53 of the Draft Law)
-Prior Year Adjustment Election (Article 54 of the Draft Law)
-De minimis Election (Article 23 of the Draft Law)
-Substance-Based Income Exclusion Election (Article 16 of the Draft Law)
-Taxable Distribution Election (Article 70 of the Draft Law)
The following are not included:
-Tax Transparency Election
-Distribution Tax Regime Election
Elections in the Administrative Guidance
No elections in the OECD Administrative Guidance are included in the Draft Law.
DEVIATIONS FROM THE OECD MODEL RULES/EU GLOBAL MINIMUM TAX DIRECTIVE
As the Draft Law only provides for the DMTT (and not an IIR or UTPR), it is specifically tailored to Uruguay’s domestic tax regime with a number of elements in the general GloBE rules not applicable for DMTT purposes.
As such, the following elections that are included in the OECD Model Rules are not included in the Draft Law:
-Tax Transparency Election
-Distribution Tax Regime Election
The Draft Law also includes specific rules for QDMTT allocation (see below).
It should also be noted that the mandatory QDMTT deviations are not yet reflected in the Draft Law.
DOMESTIC MINIMUM TAX
General
The Draft Budget Law for the period 2025–2029 includes a domestic minimum tax (intended to be a QDMTT). The Draft Law is proposed to be effective from January 1, 2026.
The QDMTT applies just to MNE groups.
QDMTT Design Features
The GloBE rules have generally been replicated in the Draft Law, subject to some aspects that are not required domestically or do not need to be included as the IIR/UTPR is not being implemented.
Article 18 of the Law provides that the standard GloBE calculation rules for determining the top-up tax, but they are then subject to a number of adjustments. The adjustments are:
Stateless Entities
Under the OECD Administrative Guidance, a domestic minimum tax does not need to apply to Stateless Constituent Entities or permanent establishments to be a QDMTT. However, jurisdictions can impose a QDMTT on these entities when they are created under the domestic law of the jurisdiction (or where a permanent establishment has a place of business in the QDMTT jurisdiction).
Article 14 of the Draft Law implements this by applying the DMTT to Stateless Constituent Entities.
Taxes Pushed-Down
Tax paid or incurred by a Constituent Entity-owner under a CFC Tax Regime that is pushed down to a domestic Constituent Entity in the GloBE Rules must be excluded, as provided in the OECD Administrative Guidance. This should also prevents the pushdown of tax to hybrids, PEs and for taxes on distributions (aside from Uruguayan withholding tax on distributions). This is not currently included in the Draft Law.
Amended Top-Up Tax Calculation
Article 15 of the Draft Law amends the standard top-up tax calculation so that the determination of the QDMTT payable does not itself require the deduction of QDMTT (which would include an element of circularity).
QDMTT Allocation
The OECD Administrative Guidance provides that the QDMTT tax liability does not need to be allocated to constituent entities in any particular way providing it is allocated to at least one constituent entity subject to tax in the jurisdiction that is legally liable for the tax. Article 21 of the Draft Law provides that the allocation in Uruguay is based on the share of GloBE income in Uruguay.
Accounting Standard
Article 25 of the Draft Law provides that GloBE income for QDMTT purposes is based on the default GloBE rules. As such the financial accounting net income or loss is the net income or loss determined for an entity, prior to any consolidation adjustments in preparing the consolidated financial statements of the ultimate parent entity. There are no provisions in the law for the use of a local accounting standard.
Registration
Not provided.
Filing
Article 71 of the Draft law provides that each constituent entity located in Uruguay must file a return to the General Tax Directorate.
The return may be submitted by the constituent entity itself or by a local entity designated on its behalf.
The return must include the following information relating to the multinational group:
a) identification of the constituent entities located in Uruguay, including their tax identification numbers;
b) information on the overall corporate structure of the MNE group, including controlling interests in entities owned by other constituent entities;
c) the information necessary for the DMTT calculation, including:
(i) the effective rate and DMTT of each constituent entity and JV;
(ii) the allocation of the DMTT;
(d) a record of the elections made.
The return must be submitted no later than 15 months after the last day of the fiscal year (18 months for the transitional year).
Payment
Article 71 of the Draft Law requires payment of top-up tax by the Return filing deadline.
Penalties
Not provided in the Draft Law.
None issued.
| Uruguay | |||
|---|---|---|---|
| Effective Date: | January 1, 2026 | ||
| Section/Article | |||
| First Set of OECD Administrative Guidance | |||
| 1.1 | Rebasing monetary thresholds in the GloBE Rules | ||
| 1.2 | Deemed consolidation test | ||
| 1.3 | Consolidated deferred tax amounts | ||
| 1.4 | Sovereign wealth funds and the definition of Ultimate Parent Entity | ||
| 1.5 | Clarifying the definition of ‘Excluded Entity’ | ||
| 1.6 | Meaning of ancillary for Non-Profit Organisations | ||
| 2.1 | Intra-group transactions accounted at cost | ||
| 2.2 | Excluded Equity Gains or Loss and hedges of investments in foreign operations | ||
| 2.3 | Excluded Dividends- Asymmetric treatment of dividends and distributions | ||
| 2.4 | Debt release Election | ||
| 2.5 | Accrued Pension Expenses | ||
| 2.6 | Covered Taxes on deemed distributions | ||
| 2.7 | Excess Negative Tax Carry-forward guidance | ||
| 2.8 | Substitute Loss carry forwards | ||
| 2.9 | Equity Gain or loss inclusion election | ||
| 2.9 | Qualified Ownership Interest/Flow through entity | ||
| 2.1 | Allocation of taxes arising under a Blended CFC Tax Regimes | ||
| 3.1 | Application of Taxable Distribution Method Election to Insurance Investment Entities | ||
| 3.2 | Exclusion of Insurance Investment Entities from the definition of Intermediate Parent Entity and Partially-Owned Parent Entity | ||
| 3.3 | Restricted Tier 1 Capital | 35, Draft Law | |
| 3.4 | Liabilities related to Excluded Dividends and Excluded Equity Gain or Loss from securities held on behalf of policyholders | ||
| 3.5 | Simplification for Short-term Portfolio Shareholdings | ||
| 3.6 | Application of Tax transparency election to Mutual insurance companies | ||
| 4.1 | Deferred tax assets with respect to tax credits under Article 9.1.1 | ||
| 4.2 | Applicability of Article 9.1.3 to transactions similar to asset transfers | ||
| 4.3 | Asset carrying value and deferred taxes under 9.1.3 | ||
| Second Set of OECD Administrative Guidance | |||
| 1 | Currency conversion rules | ||
| 2 | MTTCs | ||
| 3 | SBIE Rules | ||
| – Foreign rules | |||
| Stock-based compensation election | |||
| Leases | |||
| – Impairment losses inc in tangible asset value | |||
| 4.1 | QDMTT Safe Harbour | ||
| 4.2 | UTPR Safe Harbour | ||
| Third Set of OECD Administrative Guidance | |||
| 1 | Transitional CbCR – Purchase Accounting Adjustments (consistent reporting condition, goodwill impairment adjustment) | ||
| 2.2.1 | Transitional CbCR – JVs | ||
| 2.3.1 | Transitional CbCR – Same Financial Statements/Local Financial Statements for Statutory Reporting | ||
| 2.3.2 | Transitional CbCR – Using different accounting standards | ||
| 2.3.3 | Transitional CbCR – Adjustments to Qualified Financial Statements/Dividend Mismatches | ||
| 2.3.4 | Transitional CbCR – MNEs not required to file CbC Reports | ||
| 2.3.5 | Transitional CbCR – Qualified Financial Statements for PEs | ||
| 2.4.2 | Transitional CbCR – Treatment of Taxes on income of PEs, CFCs, and Hybrid Entities | ||
| 2.6 | Transitional CbCR – Treatment of hybrid arbitrage arrangements | ||
| 3.1 | Identifying Consolidated Revenue | ||
| 3.2 | Mismatch between Fiscal Years of the UPE and another Constituent Entity | ||
| 3.3 | Mismatch between Fiscal Year and Tax Year of Constituent Entity | ||
| 4.2.1 | Blended CFCs -multiple GloBE Jurisdictional ETRs | ||
| 4.2.2 | Blended CFCs – not required to calculate an ETR | ||
| 4.2.3 | Blended CFCs – income of non-GloBE Entities | ||
| 5.3 | 30 June 2026 Filing deadline | ||
| 6 | NMCE Simplified Calcs | ||
| Fourth Set of OECD Administrative Guidance | |||
| 1.2.1 | Aggregate DTL Category basis | ||
| 1.2.1 | Exclusion of certain types of GL accounts and separate tracking | ||
| 1.2.1 | Exclusion of GL accounts that generate standalone DTAs | ||
| 1.2.1 | Exclusion of swinging accounts and separate tracking | ||
| 1.2.2 | FIFO/LIFO Basis | ||
| 1.2.3 | Aggregation of Short-term DTLs | ||
| 1.2.2 | Reversal of DTLs that accrued before the Transition Year | ||
| 1.2.2 | 5 year unclaimed accrual election | ||
| 2.1.2 | Recalculated deferred tax where GloBE carrying value differs from accounting carrying value | ||
| 2.1.2 | GloBE and accounting carrying values and the Transition Rules | ||
| 2.1.2 | Additional provisions for Intragroup transactions accounted for at cost | ||
| 2.1.2 | Exclusion of GloBE carrying value from SBIE | ||
| 3.1.3 | General rules for allocating cross-border, current taxes under a cross-crediting corporate tax system: 4 Steps | ||
| 3.1.3 | Specific rules for foreign PEs/CFCs, Hybrids/rev hybrids with domestic source income | ||
| 3.1.3 | Cross-crediting between Permanent Establishments and distributions from foreign subsidiaries | ||
| 4.1 | Extension of the Substitute Loss Carry-forward DTA to PEs, hybrids and rev hybrids | ||
| 4.2 | Allocation of deferred tax expenses and benefits from a Parent Entity to a CFC, PE Hybrid or Rev Hybrid: 5 step process | ||
| 4.2.2 | Five-Year Election to exclude the allocation of all deferred tax expenses and benefits to CFCs, PEs, Hybrids and Rev Hybrids | ||
| 4.2.3 | Exclusion of deferred tax assets or liabilities arising under a Blended CFC regime from transition rules | ||
| 5.2.2 | Determining GloBE status when a Flow-through Entity is held directly by another Flow-through Entity | ||
| 5.3.2 | Non-group owners: Partially owned Flow-through Entities | ||
| 5.3.5 | Non-group owners: Indirect minority ownership | ||
| 5.4.2 | Taxes allocated to a flow-through entity | ||
| 5.5.2 | Hybrid entities – Taxes pushed down include indirect owners | ||
| 5.5.4 | Hybrid entities – Entities located in jurisdictions without a Corporate Income Tax system | ||
| 5.6.2 | Extension of taxes pushed down to include Reverse Hybrids | ||
| 6.1.4 | Option to exclude a Securitization Entity from scope of QDMTT | ||
| 6.1.4 | Option to not impose top-up tax liabilities on SPVs used in securitization transactions | ||
| 6.1.4 | Amendments to the Switch-Off rule | ||
| 6.1.4 | New definition: Securitization Entity | ||
| 6.1.4 | New definition: Securitization Arrangement | ||
| January 2025 OECD Administrtive Guidance | |||
| 1 | Articles 8.1.4 and 8.1.5 | ||
| 1 | Amendments to CbCR Safe Harbour for 9.1 | ||
| 1 | Amendments to QDMTT Safe Harbour for 9.1 | ||
| 1 | Article 9.1 of the GloBE Rules | ||
| 1 | Central Record of Legislation with Transitional Qualified Status |
TO DO
TO DO
This website is not affiliated with or related to the OECD. We provide independent insights and analysis on the OECD Two-Pillar Solution
© 2025 OECDPillars
All Rights Reserved
