Uruguay Extends Tourism VAT Reduction Until September 30, 2026

Uruguay has extended its 9-percentage-point VAT reduction for qualifying tourism services paid electronically until September 30, 2026. Restaurants, event services, car rentals and other affected businesses must ensure correct payment and receipt handling.

Uruguay has extended its 9-percentage-point VAT reduction for qualifying tourism services paid electronically until September 30, 2026. Restaurants, event services, car rentals and other affected businesses must ensure correct payment and receipt handling.

Uruguay has extended the enhanced VAT reduction available for certain tourism-related services until September 30, 2026. Decree No. 83/026, promulgated on April 29 and published in the Official Gazette on May 12, 2026, prolongs the temporary 9-percentage-point VAT reduction established under Decree No. 318/021.

The measure is not a new VAT incentive. It continues an existing regime that has been repeatedly extended since 2021. The previous extension, under Decree No. 93/025, was due to expire on April 30, 2026. Decree No. 83/026 therefore keeps the enhanced benefit in place for a further five months, through the end of September.

For restaurants, cafés, tourism businesses and their POS and payment providers, the distinction between the VAT rate charged by the business and the benefit received by the customer is particularly important. The regime does not simply require the seller to replace the standard 22% VAT rate with 13% on the invoice. Instead, the supplier continues to invoice and account for VAT under the general rules, while the customer receives the VAT reduction through the qualifying electronic payment process.

The regime is based on Law No. 17.934 and Decree No. 537/005 and applies to specified transactions with final consumers when the payment conditions are met.

According to current guidance from Uruguay’s Tax Authority, qualifying services include:

• gastronomic services provided by restaurants, bars, cafés, tea rooms and similar establishments, including certain services supplied by hotels and other accommodation establishments when they do not form part of the accommodation service,
• catering services for parties and events,
• other qualifying services connected with parties and events,
• rental of vehicles without a driver, and
• mediation services relating to the rental of property for tourism purposes.

The scope has also recently been expanded. Decree No. 99/026, promulgated on May 14, 2026, expressly included guided visits, wine tastings and local-product tastings at wine-tourism establishments registered with the Ministry of Tourism, provided the local products are consumed at the establishment.

For qualifying transactions normally subject to Uruguay’s 22% standard VAT rate, the 9-percentage-point reduction produces a customer benefit equivalent to reducing the VAT burden from 22% to 13%.

However, the transaction process is more specific than a conventional reduced VAT rate.

The customer must pay using an eligible electronic payment method, including credit cards, debit cards, electronic money instruments or similar qualifying payment instruments, with the payment instrument held by an individual. The benefit applies to both residents and non-residents where the applicable conditions are satisfied.

The service provider issues the sales document using the normal VAT treatment. The customer does not receive the VAT reduction directly by having the invoice recalculated at 13%. Instead, the benefit is processed through the entity administering the electronic payment instrument. That entity applies the corresponding reduction in the payment settlement.

If only part of the transaction is paid using a qualifying electronic payment instrument, the VAT reduction applies proportionally to the amount paid through that method.

This distinction matters for POS and payment-system configuration because the VAT benefit must be correctly connected to the payment method rather than treated merely as a different product VAT rate.

Eligible operations must generally be documented separately from transactions that do not qualify for the reduction. According to the Tax Authority guidance, where the same document combines transactions covered by the benefit with transactions subject to the ordinary regime, the eligible transactions do not receive the reduction.

The document must also be issued for final consumption. The payment documentation or voucher must contain information linking it to the underlying sales document and show the total transaction amount before the reduction, the amount of the VAT reduction and the final amount after the benefit. It must also indicate that the VAT reduction under Law No. 17.934 applies.

The Ministry of Economy and Finance has specifically warned businesses about correct POS configuration. Its guidance states that the VAT-point discount must appear on the electronic payment receipt and that the business is responsible for ensuring that its payment POS is correctly configured for the applicable benefit.

For hospitality and tourism businesses, this makes correct transaction and payment mapping an operational compliance issue, not merely a tax calculation question.

The enhanced 9-percentage-point reduction applies through September 30, 2026. Current Tax Authority guidance confirms that from October 1, 2026, the reduction will return to 5 VAT percentage points. For businesses under the Simplified Tax Regime, the corresponding discount will change from 7.38% to 4.1%.

This reflects the underlying regime in Decree No. 537/005, which currently provides a 5-percentage-point VAT reduction for the qualifying tourism transactions. Decree No. 318/021 temporarily increased that benefit to 9 points, and successive decrees, including Decree No. 83/026, have prolonged the enhanced rate.

Unless another extension is adopted, businesses should therefore prepare for the change from 9 points to 5 points on October 1, 2026.

Impact on affected businesses

The extension means that restaurants, cafés, event and catering businesses, qualifying tourism establishments, vehicle-rental businesses and other covered service providers can continue processing the enhanced 9-point benefit until September 30.

For POS and payment providers, the main compliance issue is ensuring that the correct VAT benefit is associated with the qualifying service, consumer transaction and payment method. Systems must also be able to distinguish eligible transactions from ordinary sales and support the information required on payment documentation.

What should businesses do?

Businesses using the tourism VAT benefit should confirm that only qualifying services and qualifying electronic payments receive the 9-point reduction.

Restaurants, hospitality businesses and payment providers should verify that POS payment terminals are configured for the correct tourism-sector VAT benefit rather than another electronic-payment reduction.

Businesses should prepare for the reduction of the benefit from 9 to 5 VAT percentage points from October 1, 2026, unless a further extension is adopted.

From a retail and hospitality compliance perspective, the extension does not require a new fiscalization model, but it does directly affect how qualifying transactions, electronic payments and associated documentation are handled. With the enhanced benefit scheduled to end on September 30, businesses and solution providers should now pay particular attention to the transition in POS and payment-system configuration for October 1.

The main source for this change is the official Tax Authority guide on the 9-point reduction VAT on certain services. Source

Ivana Picajkić, Medior Legal Consultant at Fiscal Solutions

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