Anyone planning on living here in the future should become aquainted with the BPS. Even if you’re very lucky and never have to do business with them, it’s still a good thing to know what they do, how they work, and whether or not you are, or are likely to become, someone they will want to get to know better. If you end up renting out an apartment, you will have to pay income tax. Guess who collects income tax?
Let me start by saying I’m no expert on the BPS. This blog will be of a cursory nature, representing my perceptions, limited knowledge and I think, most importantly, how an immigrant, without a strong command of the language, has worked with them on a couple of different fronts.
When I talk about the BPS here, I often say DGI, DGI/BPS or BPS. My wife and most of my Uruguayan friends refer to them as DGI. For purposes of this post, I did some research with my limited Spanish and the relationship appears to be the following.
DGI stands for Direccion General Impositiva, Ministerio de Economica y Finanzas. You can find them here: http://www.dgi.gub.uy/. To me this sounds like the equivalent of the IRS or CRA. The top of the tax food chain. This is the place you get your RUC from. It seems to me that’s the main thing they do. Collect the sales tax from retailers. If you plan on running a business here, you will need a RUC (Registro Unico de Contribuyentes). It’s your official tax number. You use this to remit and exempt yourself from the IVA (the 23% Value Added Tax that’s charge on most things you pay for here). How’s your headache so far? The BPS on the other hand seems to concentrate on collecting from employers and paying for social services like pensions. You will find these happy folks here: http://www.bps.gub.uy/
You will find references to DGI/BPS everywhere.. por ejemplo..
Unico DGI-BPS “Solicitud de Inscripción y Actualización”(color amarillo) en 3 vías firmado por titular.
If you do a renovation or construction, LEGALLY, you must establish the equivalent of a company with the BPS for the purposes of remitting payments. These payments are for the future pensions of the people working on your site. It doesn’t matter if these people contract directly to you or through a third party. For example, if you hire a GC and he in turn hires an albanil company which in turns employs a dozen albanils, you, not them, pay for the workers pension contributions. The law requires the owner of the site upon which the worker works to pay the BPS contributions. For example, if a carpenter works in the taller (shop) and makes a door for you, the owner of the carpentry shop pays the BPS. But if that same employee makes that door on your property, working on site, you pay.
When you get your BPS account, you will be given a black book. This book looks like something you buy in a stationery store, but it’s not quite what it seems. The BPS officially stamps/signs this book before you get it and you had better guard it with your life. You must record every person who works on your site in this book, with the days/times they work and the total hours they work. Each person’s cedula must be recorded by their name. Inspectors will come to your site repeatedly and veirfy that the people there that day are in that book. If you fail to do this, they have the power to fine you and shut you down or both. If the BPS shuts down a site, the police will enforce the order. This isn’t a joke. They dont play games.
When you propose a project, be it a reno or a new structure, your architect will submit the plans to the BPS and they will decide how much the charges will be. For instance, you cant have 2 sets of books. One where you show you’re paying the trades less and the other with what you really pay them. Well, you could have 2 sets of books, but what’s the point? The BPS will look at the scope of your work and tell you what you will pay based on their experience with what it should cost for the work you want to do.
Every month, you (or your designate) must go to the BPS and show them how much of the work has been done. They will calculate how much you owe them that month and print you a bill on the spot. You will also get another bill from them. This is for the month regardless how much work is done.
If you’re running a business, even a small one man shop, like mine, you still have to have a BPS number and pay pension for yourself. If you hire more people, you will declare them on your monthly remittances and your bill will be higher than the one you see below. A person in Uruguay can only get their pension when they reach the retirement age (or become disabled), if they pay into the system. This is similar in concept to the Canada Pension. So if a person works under the table their whole life, they get nothing, (or more or less nothing) when they hit retirement age. I know of a few ‘smart’ Uruguayans who did deals with employees who agreed to work under the table, only to have this unravel when the employee wanted their pensions. I’ve also heard of it going the other way. Unscrupulous employers supposedly deducting or paying BPS for employees and then folding up the business and it’s found out later, when the employee goes to claim for pension, that nothing was paid.
Below are 3 BPS invoices. The first is for a one man, unipersonal company. This is what you will pay if you set up a owner operated and solely employed business. The 2nd represents a BPS invoice for the regular monthly fee paid on an account that’s sole purpose is to represent a renovation/construction project. The 3rd invoice represents a month’s worth of labour fees for a renovation/construction project.
Couple of things worthy of note..
The purple stamps are from the Abitabs. Thats where I go to pay all the bills that I cant put on autodebit. BPS is one of only 2 bills you can pay at an Abitab with a cheque. That’s what I used. Supposedly you can put BPS on autodebit, but I never did that for the consruction project. Notice there is no mention of your cedula. Notice there is no mailing address on the construction invoices. Notice that they include a fee for medical insurance on the unipersonal company bill. They print on the invoice when your next invoice will be coming. You get 13 days to pay on unipersonal companies. For construction, you get more time. If you dont pay your BPS construction bill on time, you do not pay a 10% penalty. It’s significantly less.. More like interest. Unlike the unipersonal invoices, construction invoices dont carry a balance forward. If you dont pay it, you must take the invoice with you to the BPS office and pay it on the spot. If you miss paying a unipersonal, you can wait for the next one which will show the total you owe, including the previous month’s balance. If you dont pay BPS invoices by the due date ‘fecha de vencimiento’ the shops that accept payment wont. You have to go to BPS HQ.