Uruguay is one step away from accessing an important market: that of the large Brazilian investors. This hand in hand with the end of the double taxation between the two countries, a measure that only remains to be enacted by the government of Brazilsomething that would happen in the next month.
“The end of the double taxation of income between countries is important because it favors the business environment, favors the investmentfavors the economic activity In general, it allows the realization of new business opportunities or the expansion of existing businesses, which is why it was an agreement that we owed to each other between the countries,” said the senator. Sergio Botana to Ambit.
The legislator of National Party (PN), who was the promoter of this initiative that received the approval of the Senate in June Brazilaffirmed that “inside the mercosur there should be a general agreement of this kind”.
“The approval will imply the application of an advantage for income generated from January 1, 2024. We still do not have the promulgation by the Brazilian State, but there is a strong follow-up of Chancellery and the tax area of the Ministry of Economy and Finance (MEF)with which we have every hope that it will be solved in the next month ”, explained Botana.
The end of double taxation between Uruguay and Brazil will preserve the tax power in the source of payment of income originating in the country, although not exclusively. In addition, according to the text, “limits to withholding taxes on dividends, interest, royalties and technical services and technical assistance at levels compatible with the network of agreements” were established.
In Uruguay, the taxes included are the following: onthe Income from Economic Activities (IRAE)on Personal Income (IRPF)), on Non-Resident Income (IRNR), Social Security Assistance (IASS) and on the Heritage (IP).
“We must generate these types of tools. Besides, Brazil It has investors with enormous capacity, which should be taken advantage of by a smaller-scale economy such as Uruguay. It really is a partner of excellence and we are deeply happy with this opening that has been taking place”, stressed Sergio Botana.
The nationalist senator, who is part of the upper house commission that will evaluate the draft Accountability presented by the MEF, also analyzed in dialogue with Ámbito what the process of this regulation will be like.
“The government is placing emphasis on compliance with the fiscal rule and in maintaining good conduct in terms of managing finances and in turn investing in the most sensitive sectors of national life. It is a double challenge that requires no less financial engineering, but we have a lot of faith that the objectives that are set will go ahead,” Botana considered.
Regarding the impact that the economic situation on Argentina in the drop in collection by the DGI, recalled that the fiscal rule, in addition to taking into account the growth of the economy, “provides an increase in spending when the economic cycle is falling or slowing down. Which widens the margin a bit as appropriate at times when these retractions in collection occur.
Source: Ambito
