In a year that started with good news for electric vehicles, after the elimination of the Internal Specific Tax (IMESI), Uruguayan authorities are analyzing the exemption of the Value Added Tax (VAT) to this segment.
Currently, from the tax point of view, the only remaining rate for electric vehicles is the VAT, and this tax would be the next step taken by the government to promote electric vehicles.
It should be recalled that, as of January 1, Uruguay eliminated the IMESI, which was at 5.75%. It is also noteworthy that the country does not charge the Common External Tariff, which is 23% for combustion vehicles.
On the other hand, the Patente de Rodados, which is the municipal road tax, is charged at half the price of a combustion vehicle.
Also, companies have the option of including electric vehicles in investment projects. In this way, based on Uruguay’s Investment Promotion Law, the private company has several tax benefits throughout the project, which allows lowering costs.
The ACAU seeks to include the electric vehicle within the universe of vehicles that can use leasing as a financial instrument and thus eliminate VAT. At present, this system is only available for utility vehicles.
Through leasing, the general public will be able to use the leasing mechanism and thus exempt VAT and be able to finance the vehicle for three years.
In this way, Uruguay would become one of the countries with the least tax obstacles in the region, which they hope will allow the development of electric vehicles at a faster rate.
At present, electric vehicles account for 1.11% of the market, although the segment is doubling year after year. Approximately 600 vehicles were sold in 2021. 248 correspond to cars, 130 to the SUV segment, 131 to utilities and 39 to trucks. Some missing numbers come from brands that are not represented in the country.
In addition, several companies have already anticipated that new electric and hybrid models will arrive in the country in 2022.
Many importers have already unofficially announced that this year they will bring two or three electric models from different automakers. This will cause the electric fleet to grow exponentially.
Growth is expected as a result of the evolution of the battery, thanks to its lower price and increased autonomy, thus awakening people’s interest.