In Uruguay, the General Cooperative Law No. 18,407 (GCL), published in the Official Gazette on 11/11/2008 unified the legal regime of all kinds of cooperatives. By law 19.181, published on 01/20/2014, some modifications were introduced to the GCL. Likewise, the provisions of the Law on Commercial Companies 16.060 are applied in addition to cooperatives if compatible, as provided in art. 4 of the LGC.
For its part, the Uruguayan Constitution does not include programmatic or interest clauses about cooperatives, there is only a marginal reference in section 3 of art. 188, stating that the State can “participate in industrial, agricultural or commercial activities of companies formed by workers, cooperatives or private capital contributions”.
In recent years the legislation has helped consolidate the institutionality of the cooperative movement, by providing for its participation in INACOOP, in the National Institute for Employment and Vocational Training (INEFOP), in Fondes-Inacoop and in the National System of Productive Transformation and Competitiveness
In general, there is coincidence regarding the merit of the LGC and that the legislation is in favor of cooperatives, but there are still areas where they are not recognized as fully valid actors (especially in the political and bureaucratic field); It would be the case of financial activities in general.
Key recommendations for improvement
• Recognition of the Cooperative Act as the axis for the treatment of cooperatives in fiscal matters, as well as in general for the different instruments related to cooperatives.
• Recognition of cooperatives as not subject to Income Tax (IRAE), instead of considering them exempt, since this treatment means only a legal concession. And review what is related to taxing with the personal income tax the return of social shares and the distribution of surpluses.
• In a constitutional reform incorporate the recognition and support of cooperativism and social economy.
A bill of social and solidarity economy law was recently approved in the House of Representatives, being its fundamental basis a draft project presented to public opinion by INACOOP in mid-2017 to: “Promote the study and research of other forms of social and solidarity economy and make proposals on its scope and regulation ”. The half-sanction project recognizes cooperatives as the main legal figure and, at the same time, refers to the application of the universal principles of cooperativism.