A circular (no. 9/2017) was issued to address the tax implications when assets used in investment projects are sold before the end of the asset’s useful life or are sold before the expiration of a 10-year period in the event that the asset’s useful life is greater than 10 years.
Article 13 of Decree No. 2/012 established that assets that were used in investment projects that were granted tax-favorable treatment had to be maintained for the end of their useful life or for 10 years in the event that the useful life of the asset was greater. If the taxpayer were to sell such assets before the end of their useful lives, there would be taxation for the amount of the tax benefit based on a percentage corresponding to the remaining period of the asset’s useful life. However, if the asset that is sold is replaced by a similar asset, no adjustment would be required, provided that the proper authorization was granted.
The circular sets forth how a taxpayer is to determine the percentage of actual use of the sold asset, for purposes of determining the amount of tax due.
Read a February 2018 report (Spanish) [PDF 572 KB] prepared by the KPMG member firm in Uruguay
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