On December 15 the OECD announced that it has moved Uruguay to the list of countries that have substantially implemented the standard for exchange of information (the white list) because the country has executed more than 12 exchanges of information agreements. (For the OECD release, see Doc 2011-26504 or 2011 WTD 243-43.)

In April 2009, when the OECD issued its original progress report on the implementation of the internationally agreed tax standard on the exchange of information, Uruguay was blacklisted as a jurisdiction that had not committed to the internationally agreed standard. (For prior coverage, see Doc 2009-7969 or 2009 WTD 65-2; see also Doc 2010-12438 or 2010 WTD 109-8.)

The Uruguayan government reacted quickly, and after only 72 hours, Uruguay was removed from the blacklist and placed on the gray list of jurisdictions that had committed to the internationally agreed tax standard but had not yet implemented it. In November, Uruguay was still on the gray list, with 10 agreements on record.

The December 15 announcement was a response to Uruguay signing seven new agreements providing for the exchange of tax information, showing its willingness to implement the global standards. Since April 2009, Uruguay has signed double tax agreements or tax information exchange agreements with Spain, France, Mexico, Germany, India, Liechtenstein, Switzerland, Ecuador, Malta, Portugal, Denmark, Faroe Islands, Finland, Greenland, Hungary, Iceland, Norway, Sweden, and South Korea. Only the agreements with Spain, France, and Mexico are in force.

“The signing of these new agreements shows that Uruguay is committed to moving quickly towards full transparency and effective information exchange,” OECD Secretary-General Angel Gurría said.

The OECD’s decision is a relief to the Uruguayan government as it works to implement legislative changes and other measures to address the shortcomings found by the Global Forum’s Phase 1 peer review mad public on October 26. The report concludes that Uruguay was not yet fully compliant with the exchange of information standards and recommended against moving forward with a Phase 2 review until the recommendations set forth in the report were adopted. (For prior coverage, see Tax Notes Int’l, Nov. 14, 2011, p. 466, Doc 2011-23310, or 2011 WTD 215-1; for a related OECD release, see Doc 2011-22611 or 2011 WTD 209-26.)

The peer review report acknowledged the improvements Uruguay has made in terms of changes to its internal legislation and treaty network, but it expressed concerns regarding its bearer shares regime and the lack of treaties with relevant partners, namely Argentina and Brazil.

The government announced that it was willing to review its bearer shares regime and that it was studying alternatives to comply with the Global Forum’s requirements in this regard. Both the Costa Rican and the German models are being analyzed, and a bill is expected to be sent to Congress in the next few months. The government also announced that it will negotiate agreements with Argentina and Brazil but will do so within the Mercosur framework and not on a bilateral basis.

Once Uruguay implements these measures, it will be ready to move to a Phase 2 review, originally scheduled for 2014.

Isabel Laventure, senior associate, Ferrere Attorneys at Law, Montevideo. Published in Tax Notes International, Volume 65, Number 1, January 2, 2012.

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