General description VAT has been levied in Uruguay since 1972 and has acquired greater importance through the years. Apart from being the principal source of revenue, the main economic objective of VAT is to tax domestic consumption of goods and services without introducing any distortion into competitive relationships. It is intended to be nondiscriminatory, both regarding imports as compared with domestic products and regarding the number of business entities taking part in the economic process and their degree of vertical or horizontal integration. Individuals and entities liable to VAT All business undertakings that are corporate income taxpayers are also VAT payers. VAT also applies to self-employed individuals and associations of individuals rendering personal services.
Special rules apply to farming-income taxpayers.
VAT liability arises at the time of delivery of goods, completion of service and delivery or introduction of goods through Uruguayan borders. See Appendix Vll . The tax is calculated on net amounts invoiced for sales and services, and must be specified in the invoice. Invoices must comply with certain minimum formalities prescribed by the related regulations, such as preprinted sequential numbering, direct identification of the seller and the buyer, the seller and buyer's tax registration number, and the amount of the tax. The standard rate is 22 percent, but a reduced rate of 12 percent is imposed on sales of specific goods, such as basic food items and medicines, interest on personal loans and services rendered by hotels.