Uruguay wants to tax Netflix and other Internet services

The Uruguayan Government included in its Accountability bill a change that would tax Netflix, Spotify and other companies offering services through the Internet.

According to El Observador, Accountability bill states that income generated partially or totally abroad, will be considered 100% Uruguayan sourced. In this way, they will be included in the Income Tax for Non-Residents (IRNR in Spanish).

According to the project, as from January 1, 2018, income obtained by non-resident entities that provide services directly on the Internet, technology platforms, applications or similar means will be considered as entirely Uruguayan-sourced income when the applicant is located in Uruguay.

In addition to the IRNR, the project states that these services should be taxed with VAT. In this way, the Government will collect around USD 10 million annually only by Netflix, according to calculations made by the team of Deputy Jorge Gandini of Partido Nacional. The bill has yet to be approved by Parliament.