A developer living in Uruguay can have a transaction that qualifies as a VAT service export while the underlying work income remains taxable. VAT and income tax are separate analyses.
Software service exports
The export list includes qualifying custom software design, development and implementation, software licences and transfers of software-use rights. The statutory conditions, including foreign use where applicable, must actually be met.
Remote work performed in Uruguay
DGI expressly states that a resident performing services from Uruguay for a foreign company over the Internet has IRPF-taxable income because the activity is performed in Uruguay.
IRAE and the software exemption
A specific IRAE exemption exists for qualifying software activities and related services. It has entity, activity and documentation requirements; generic IT consulting is not automatically exempt.
Before choosing a sole proprietorship or SAS
- Separate VAT from income tax.
- Describe whether you sell custom development, licences, SaaS, consulting or a mix.
- Document where the output is used.
- Verify IRAE eligibility before comparing tax rates.
- Include BPS/Fonasa and administration costs.
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