VAT (IVA) in Uruguay, explained simply

VAT (IVA) is scarier than it needs to be. It's a consumption tax: you charge it to your clients and pass it to the DGI. Here's when it applies, the rates, and the cases that matter most to an independent worker.

The rates: 22% and 10%

There are two rates. The basic rate is 22% and applies to almost everything; the minimum rate is 10% and applies to a short list (basic foods, medicines, health, among others). Some things are exempt. The DGI sums it up:

On the rates, the DGI states:

«En principio todos los bienes y servicios están gravados a la tasa básica del 22%, salvo que estén exonerados o que se encuentren gravados a la tasa mínima del 10%»

In English: In principle all goods and services are taxed at the basic rate of 22%, unless exempt or taxed at the minimum rate of 10%.

Output vs input VAT: you pay the difference

You don't pay VAT on everything you invoice. You charge VAT on your sales (output VAT) and deduct the VAT you paid on business purchases (input VAT). You pay the DGI the difference. That's why keeping your purchase receipts lowers what you pay.

IVA mínimo (Literal E): the case for many sole traders

Small Literal E taxpayers don't compute ordinary VAT: they pay an IVA mínimo, a fixed monthly amount, instead of working out output and input VAT. It's simpler — but for that reason you can't deduct the VAT on your purchases. How much and how to pay it: see our monthly-cost and how-to-pay posts.

Exporting services = zero-rated

If you provide services to foreign clients used abroad, it's usually treated as export of services, zero-rated (you charge no VAT and the credit is refunded). Key for anyone invoicing abroad; we cover it in the post on invoicing a foreign client.

VAT at a glance

In short: almost everything is 22%, some things 10%, exporting services is zero-rated, and Literal E taxpayers pay a fixed IVA mínimo. Knowing your case avoids under-charging or over-paying. Always verify the current rates and exemptions with the DGI.