Uruguay Extends Reduced VAT Rate for Tourism Sector Until September 2026

Summary 

• Uruguay has extended the reduced VAT regime for tourism-related services until 30 September 2026 through Decree No. 83/026, published on 12 May 2026.
• The measure continues a 9 percentage-point VAT reduction (or full relief in certain cases), conditional on electronic payment methods.
• The extension aims to support the tourism sector and maintain international competitiveness, continuing a policy first introduced in 2021 and repeatedly prolonged.

Source www.impo.com.uy

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Article

1. Legal framework and new extension

On 12 May 2026, Uruguay published Decree No. 83/026 in the Official Gazette, extending the application of the reduced VAT regime for tourism activities until 30 September 2026. [impo.com.uy]

This decree builds on:

• Decree No. 318/021, which originally introduced the VAT reduction, and
• subsequent extensions, most recently Decree No. 93/025, which had prolonged the measure until 30 April 2026. [impo.com.uy]

The new measure therefore ensures continuity of the regime for an additional five months.

2. Scope of the reduced VAT regime

The regime applies to a defined set of tourism-related services, typically including:

• Gastronomic services (restaurants, bars, cafés),
• Catering and event-related services,
• Services linked to events and entertainment,
• Car rental services without a driver,
• Certain real estate mediation services for tourism.

These categories reflect the same scope established under the original framework and maintained across successive extensions. [regfollower.com]

3. VAT benefit and conditions

The measure continues the reduction of VAT by 9 percentage points, lowering the effective rate from the standard 22% to 13% in most cases. [regfollower.com]

In parallel, separate regimes may also provide:

• full VAT exemption (0%) for certain supplies to non-resident tourists,
• or equivalent discounts in simplified tax regimes.

A key condition remains unchanged:

• The benefit applies only where payments are made via electronic means (e.g. credit cards, debit cards, or electronic money). [regfollower.com]

This requirement aligns with Uruguay’s broader policy objectives of promoting:

• formalisation of the economy, and
• traceability of transactions.

4. Policy objective

The government explicitly states that the extension is intended to:

• continue supporting the tourism sector, and
• maintain economic activity and competitiveness in a regional context. [impo.com.uy]

This reflects a consistent policy approach since 2021, where VAT has been used as a targeted economic stimulus tool for tourism, particularly in response to:

• post-pandemic recovery challenges, and
• price competitiveness pressures in the region.

5. VAT and business implications

From a VAT and operational perspective, the extension implies:

1. a) No immediate system changes

Businesses can continue applying the existing reduced VAT treatment, avoiding short-term disruptions.

1. b) Continued need for payment validation

The requirement for electronic payment remains critical, meaning businesses must:

• ensure correct payment classification,
• maintain audit trails,
• align POS and invoicing systems accordingly.

1. c) Ongoing complexity due to layered regimes

The coexistence of:

• reduced VAT rates,
• full exemptions for non-residents, and
• standard VAT rules

creates classification and documentation challenges, especially for multinational groups and shared service environments.

6. Takeaway

The 12 May 2026 Gazette confirms Uruguay’s continued reliance on VAT-based incentives to support tourism, with the regime now extended until 30 September 2026.

For businesses, the key focus is not on rate changes, but on correct application of eligibility conditions and transactional controls, particularly around payment methods and customer status (resident vs non-resident).

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