Uruguay: Stronger Controls and Penalties for Fraudulent Invoices

Uruguay’s Tax Authority (DGI) is strengthening controls and penalties against taxpayers who use fraudulent invoices to unlawfully reduce their tax obligations.

The authority emphasized that responsibility does not apply only to companies that issue false invoices. It also extends to businesses that use them to claim improper tax benefits, as well as advisers or other parties involved in organizing or facilitating such schemes.

Fraudulent invoices include documents that:

• refer to transactions that never occurred,
• show amounts higher than the actual transaction value,
• identify a different supplier from the person or business that actually carried out the transaction.

Companies issuing fraudulent invoices often show signs such as prolonged tax non-compliance, unusually high sales with very low expenses, non-existent or inaccessible addresses, and a lack of employees, equipment or other resources required to perform the reported activities. These entities are commonly referred to as shell companies.

Tax fraud may result in financial penalties ranging from one to fifteen times the amount of tax evaded. Criminal proceedings may also be initiated.

Depending on the identified risk, the Tax Authority may send personalised warnings, conduct tax audits, require taxpayers to correct their tax position and publish the names of those involved in confirmed fraud cases.

The Tax Authority may also remove fraudulent issuers from the electronic fiscal document (CFE) system, invalidate their issued documents and publish a list of disaffiliated issuers on its website.

The Tax Authority warned taxpayers not to participate in such practices and reminded businesses facing financial difficulties that legally available tax payment arrangements may be used instead.