31 May 2019

Uruguayan A.S. (Anonymous Societies) as holding: tax aspects to be considered

We will now develop the tax treatment applicable to the Uruguayan companies used as "holdings", which are those entities whose asset is composed of shares of a conglomerate of companies, whether local or foreign.

In order to simplify the analysis, we will assume that all of the assets of the society is exclusively composed of shares, without owning any other asset in the country.

Taxation applicable to society -Income tax

The holding of shares of other companies generates the following results:

  • Result by holding
  • Profits for received dividends 
  • Result from sale of shares

Both the result by holding and the gain derived from dividends received from companies, are not taxed by the Income Tax of Economic Activities (ITEA).

In regards to the result derived from the alienation of shares of any of the societies which the local holding owns, the treatment to be granted will depend on the country of residence of the societies whose shares are alienated:

Uruguay: The result is taxed by ITEA at the rate of 25.


  • The result is not taxed by ITEA, for being income from foreign source.
  • Domiciled in countries of low or null taxation ("BONT"): in this case the concept of Uruguayan source is expanded, so the result derived from the alienation of shares is taxed by ITEA, as long as more than the 50% of the asset of the foreign society is integrated, directly or indirectly, by assets located in the Republic.

"BONT" countries are those to verify the following conditions:

I) its effective rate of income tax to activities or property located in the Republic is less than 12%; and 

II) an information exchange agreement is not in force.

Wealth tax

Wealth Tax (WT) taxes the holding of assets in the country at the rate of 1.5%, allowing the deduction of certain liabilities (basically local commercial debts). 

The holding of shares of other companies, whether local or foreign, are not taxed by this tax, subtracting from the fiscally adjusted asset (the former for being considered to be assets expressly exempted from the tax, and the latter because they are assets outside the country).

This means that this type of company will not have a significant cost for this concept.

By the CPA. Alexandra Weisz from Auren Uruguay

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