How to invoice a foreign client (export of services)
If you work for clients abroad, it's most likely export of services: invoiced without VAT. But income tax still applies. With official sources.
Plenty of Uruguayan freelancers and IT companies invoice foreign clients. The big question: do I add VAT? Usually no — it's export of services. But beware, that does not free you from income tax. Here it is clearly.
Exporting services: invoice without VAT
When you provide a service to someone abroad that is used exclusively abroad, it's usually export of services. The invoice carries no VAT — and the VAT on your related purchases can still be deducted. The DGI frames it like this:
On when it's export of services, the DGI states:
«Los servicios prestados a personas del exterior siempre que sean aprovechados exclusivamente en el exterior, tales como los servicios de asesoramiento prestados en relación a actividades desarrolladas, bienes situados o derechos utilizados económicamente fuera de la República, pueden tratarse como exportación de servicios»
In English: Services provided to persons abroad, provided they are used exclusively abroad — such as advisory services relating to activities carried out, goods located or rights used economically outside the Republic — may be treated as export of services.
DGI — VAT exemptions in forcehttps://www.gub.uy/direccion-general-impositiva/comunicacion/publicaciones/son-exoneraciones-vigentes-ivaWhat counts as export of services?
It isn't “any service to a foreigner”. Decree 220/998 (art. 34) has a closed list of activities treated as export, always on the condition that the service is used exclusively abroad. Before invoicing without VAT, check that your case is on the list:
Decree 220/998 (VAT regulation) — IMPOhttps://www.impo.com.uy/bases/decretos/220-1998What about income tax?
Here's the costliest mix-up: no VAT does not mean no income tax. Your income from those services is still taxed — IRPF if you're a personal-services provider, or IRAE under that régime / as a company. The exemption is VAT-only. See our IRPF and IRAE posts for your case.
On the e-invoice
You issue an electronic export invoice, without VAT, identifying the foreign client. You can invoice in a foreign currency (e.g. dollars). Issuing CFE in general is covered in our electronic-invoicing post.
Invoicing abroad, at a glance
| Aspect | How it works |
|---|---|
| VAT | No VAT (export of services) |
| VAT on your purchases | Deductible even though the sale has no VAT |
| Income tax | Yes: IRPF or IRAE per your régime |
| Document | Export e-invoice (may be in USD) |
In short: invoicing a foreign client is usually export of services — no VAT, but normal income tax. Confirm your activity is on the decree's list and always verify with the DGI or your accountant before issuing.