Uruguay clarifies foreign-custody and ownership-chain withholding responsibilities

Foreign custody does not remove the local role

Article 8 amends Article 44 quinquies of Decree 148/007. A resident intermediary can be treated as exercising custody even when an overseas entity physically holds the assets. It must act for the taxpayer in investments in assets issued by non-residents, using international custody services, and retain the contractual relationship with the foreign custodian. Further overseas subcontracting does not by itself break that relationship.^[2][4]

The provision also treats open-ended investment-fund administrators as custodians of the fund’s investments. Where the Montevideo stock exchange or another central-bank-authorised resident entity holds the securities, custody is attributed to those acting for the taxpayer. This allocates a compliance role; it does not turn every foreign group company into a withholding agent.^[4]

Trace the ownership chain

Article 1 adds rules to Article 6 bis for income imputed to IRPF individual beneficiaries. For an exclusively resident chain, withholding falls on the entity whose interests are owned by the individuals. In a mixed chain, that is also the starting point; if that entity is non-resident, any resident entity in the chain may withhold. An exclusively non-resident chain instead refers to designated entities under Article 44 septies and requires an appointed representative.^[3]

The same amendment excludes imputation where the relevant income is paid to an IRAE business-income-tax taxpayer and is effectively taxed by IRAE. The condition is actual taxation, not merely the recipient’s corporate form.^[3]

Operational evidence

For the specified withholding calculations, Articles 9 and 10 allow the responsible person to choose the interbank exchange rate at month-end or on the day before the transaction. The choice cannot subsequently be changed. Separately, Article 11 requires reliable proof of the non-resident entity’s actual IRNR payment and its relationship with the individual claiming the corresponding credit.^[5][6]

Our practical reading is that cross-border financial groups should map custody contracts, entity residence and taxpayer relationships before allocating reporting work. Publication occurred on 13 October, although the decree was signed on 1 October; the instrument states no separate commencement date.^[1][2][4]