COVID-19 Uruguay Solidarity Fund

On April 24, 2020, the Executive Power (EP) issued Decree 133/020, regulating Law 19,874, which created the COVID-19 Solidarity Fund within the health emergency framework that the country is experiencing.

Target

The purpose of the regulation is to implement the operation of the fund, as well as the management procedures. It also sets forth the regulations to apply the tax created for the fund and the additional tax to the Impuesto de Asistencia a la Seguridad Social – IASS (Social Security Assistance Tax).

Scope

The COVID-19 Health Emergency Tax levies monthly in full on remunerations and nominal benefits, in cash or any other means to afford, derived from personal services rendered to the State, Departmental Governments, Autonomous Entities, and Decentralized Services, non-state public law persons, and state-owned entities in which the State or any public entity owns a majority shareholding, regardless of the legal nature of the dependency relationship (the complementary annual salary and, if applicable, the vacation salary are excluded from the tax). The tax will be paid to the tax levying agencies through withholding. The nominal taxable income is from $ 120,000, applying the rates progressively, ranging from 5% to 20% under the following table:

This tax created will not be deductible to determine the personal income tax.

Entities and individuals subject to this tax

• State Officials, Departmental Governments, Autonomous Entities, Decentralized Services, and other entities are included in Articles 220 and 221 of the Constitution of the Republic.
• Those who render personal services, inside or outside of a dependency relationship, in non-State public law persons and State-owned entities with a majority shareholding of the State or any public entity (Article 7, Decree 133/020).
• Those who maintain personal service contracts with the State, Departmental Governments, Autonomous Entities, Decentralized Services, and other entities included in Articles 220 and 221 of the Constitution of the Republic along with work and service leasing contracts, motivated by temporary linkages.
• President and Vice President of the Republic, Legislators, Ministers and Undersecretaries, Departmental Intendants, and other political officials and trustworthy officials.
• Those who receive subsidies granted by law for occupying political positions or those trustworthy ones.
• Those who perform tasks abroad or represent the country in Binational Commissions.

The following are excluded: health personnel who participate directly or indirectly in the assistance process (medical and non-medical workers), so due to their labor are exposed to the contagion of SARSCoV2, which causes the COVID-19 disease. Each entity that renders such services will inform the Dirección General Impositiva – DGI (General Tax Directorate) of the personnel excluded.

Additional to the Social Security Assistance Tax (IASS)

The Adicional al Impuesto de Asistencia a la Seguridad Social – IASS (Additional to the Social Security Assistance Tax) levies the total income corresponding to retirements, pensions, military, and police retirements, and similar passivity benefits, provided by public, parastatal, and private institutions.

The referred additional tax will be levied monthly in April and May 2020, and probably in June and July 2020 if the Executive Power provides it, according to the following scale of monthly income and corresponding rates:

There is no case that the number of retirements, pensions, military or police retirements, or similar liquid passivity benefits, after deducting the contribution to the corresponding health system, the Social Security Assistance Tax, and the tax to be created may be less than the greater of the following amounts:

1. $ 100,000 (one hundred thousand pesos) net per month.
2. The net amount resulting from the highest income of the previous range according to the liquidation of an individual without close relatives or other relatives in charge for the purpose of personal contributions to the corresponding health system.