Uruguay modifies conditions for employees who work remotely under Free Trade Zone regime

Through Decree No. 69/024, the Uruguayan Government has modified the previous conditions under which Free Trade Zone employees may perform their employment activities remotely. (For background, see EY Global Tax Alert, Uruguay's Executive Branch approves conditions for employees of Free Trade Zone users to work remotely, dated 14 October 2022.)

The main modifications are as follows:

• A new exception is introduced establishing a 5% increase to the remote-work limit percentage, from 40% (general rule) to 45%, provided that at least one of the following conditions is met:
  
  
  1. The distance between the employee's residence and the workplace is minimum of 200 kilometers.
     
     
  2. The company has at least 15 personnel dependents (i.e., employees).
     
     
  3. The investment in the company's assets has exceeded 10 million Index Units (approximately US$1,550,000) for two consecutive closed fiscal years.
      
• The requirement that the workforce of users of Free Trade Zones must comply with 1,000 monthly hours of work in the office is eliminated.
  
  
• Now part-time employees may work remotely — previously, this regime only applied for full-time employees (i.e., employees with a working schedule exceeding 25 hours per week).

The rest of the conditions remained the same as those established in the previous Decree No. 319/022, mainly:

• Remote work can only take place from the home address of the employee in Uruguay.
  
  
• Ten percent of the workforce may be exempted from complying with the 60% monthly office-hour requirement, if certain conditions are met (i.e., provided this is established in the agreements between the free trade zone users and their employees).
  
  
• The sum of monthly office hours completed by all employees of users of Free Trade Zones may not be less than 60% of the overall monthly workload.
  
  
• The developers of Free Trade Zones will have to keep a record of the agreements signed between the user and their employees under the conditions established by the National Directorate of Free Trade Zones.

The following employees are excluded from applying the remote-work regime:

• Employees who directly develop production or manufacturing, distribution or logistics operational activities
  
  
• Employees who carry out substantive commercial activities, as established in article 14 of the Free Trade Zones Law
  
  
• Employees who carry out auxiliary and complementary activities provided for in the Free Trade Zone regulation

Decree No. 69/024 was published in the Official Gazette on 13 March 2024 and will be effective 10 days after publication. It can be accessed here (only in Spanish).

Contact Information

For additional information concerning this Alert, please contact:

EY Uruguay, Montevideo

• Rodrigo Barrios
  
  
• María Inés Eibe
  
  
• Lucia Giagnacovo
  
  
• Piero de los Santos

Ernst & Young LLP (United States), Latin American Business Center, New York

• Lucas Moreno
  
  
• Ana Mingramm
  
  
• Pablo Wejcman
  
  
• Enrique Perez Grovas

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

• Lourdes Libreros

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

• Raul Moreno, Tokyo
  
  
• Luis Coronado, Singapore

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.