Global Tax Alert (News from Americas Tax Center) | 4 December 2013

Uruguay bill proposes consequences for failing to comply with bearer shares identification requirement

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On 28 October 2013, Uruguay's legislature proposed a bill to resolve the problems that make it difficult for companies to comply with the identification of equity holders of bearer shares (established in Law No. 18,930). It also would punish corporations (Sociedades Anónimas) and companies limited by shares (Sociedades en comandita por acciones) that have not complied with the obligation to identify their shareholders.

In order to fulfill those objectives, the proposed bill would:

  • Give companies that have their equity in bearer participations 90 days from the effective date of the new law to comply with the obligation to provide information about the bearer equity holders that represent at least 50% of the integrated capital or equivalent
  • Make extinct or dissolve ipso iure the companies that do not comply with the identification obligation
  • Require companies dissolved ipso iure to be liquidated within 120 days counted from the 90-day deadline
  • Rescind or revoke all mandates and powers that a company had granted until the time of dissolution
  • Exempt the dissolved companies from the Corporate Control Tax (ICOSA) from the first fiscal year end after the date of such dissolution
  • Exempt from all taxes the award of all kinds of goods made to equity holders of bearer shares, as a result of dissolutions or extinctions established in the new law, provided that it is exercised within the mentioned 120-days period
  • Revoke the holder's quality of the corresponding integrated capital ipso iure, if the bearer capital participation holders do not comply within 90 days from the effective date of the new law with the obligation of submitting the return to the issuer entity

The bill also would establish that after 90 days from the effective date of the law:

  • The Central Bank of Uruguay (BCU) shall only accept returns containing information of 100% of the issued participations.
  • It shall be presumed that the actual holders shall be the founders or ancestors, registered or scriptures, of the entities subject to the regime of Law No. 18,930, when the equity holders of bearer shares issued by such entities do not comply with the obligation to identify.
  • Whenever the bylaws or equivalent are changed or whenever the social percentage of ownership (added by the bill) is modified pursuant to capital increase, and do not comply with the reporting obligation to the BCU after 90 days from the deadline for its submission, the holder quality will be lost ipso iure in respect of the new contributions of integrated capital or its equivalent, or equity, as appropriate.

The bill also would add data that the Uruguayan tax authorities can make partially or entirely public of individuals, legal persons or other entities registered in the Unique Taxpayers Registry (RUT). The added data would include: name, billing address, obliged taxes, regularity in meeting their tax obligations, status of certificate of good-standing, and other data for the effective identification of the taxpayer or responsible party, as well as the performance or breach of the obligations established by Law No. 18,930.

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Uruguay), Montevideo
  • Martha Roca
    +598 2902 3147
  • Rodrigo Barrios
    +598 2902 3147

EYG no. CM4003