Production of services Type and maximum number of authorized business activities

72 Uruguay - The inclusion of independent workers in the Monotributo scheme 11.2.7. Monthly amount of the Monotributo scheme, and allocation computable in the social security system Before the reform, the establishment of the monthly amount to be paid by the companies registered in the Monotributo scheme 14 and the corresponding allocation computable in the social security system was calculated based on the applicable rates of social security contributions and taxes charged by the BPS excluding the Mutual Quota Supplement, unless the contributor chose it on a fixed salary equivalent to a national minimum salary. After the reform, the monthly amount contributed under Monotributo, and its respective allocation to the social security system results from the application of the sum of the rates of the taxes charged by the BPS 15 on the basis of a fixed salary of five Contribution Fixed Bases BFC 16 . As illustrated in table 17, the Executive may increase the fixed salary on a scale of six to ten BFC, according to the developed activities, the size of the location, and other indexes 17 . Table 18. Uruguay: Monthly Monotributo amount according to the contribution fixed base level, 2007- Pesos Fixed Salary U Monotributo amount without mutual quota supplement U Monotributo amount with mutual quota supplement U 5 BFC = 1 367 419 1 237 6 BFC = 1 640 503 1 299 7 BFC = 1 914 586 1 360 8 BFC = 2 187 670 1 422 9 BFC = 2 461 754 1 484 10 BFC = 2 734 837 1 545 Source: BPS Instituto de Seguridad Social, 2007. It should be noted that contributors to the Monotributo scheme maintain all the rights stemming from their registration in the social security system through the BPS. In this sense, they have the right to the calculation of the period of activity for the grant of a benefit, or to increase it should they already have it. Nevertheless, the contributors to the Monotributo scheme who choose to pay the Mutual Quota Supplement CCM have access to Social Protection, and to its supplementary benefits for example: prostheses and lenses coverage, subsidies for treating of circulatory infections, wheelchairs, prosthetic limbs, hearing aids. One-person businesses with no dependents and with a family household income under three BFC are entitled to a family benefit from the new Family Benefit System. Under the 14 This single tax excludes the social security contributions and taxes applicable on the remunerations of dependent workers. 15 Excluding the Mutual Quota Supplement. 16 After the reform, there is still an incentive of returning a monthly annual quota for contributors paying at the end of each month, and by automatic debit to their bank accounts or with credit card. 17 The existence of a co-working spouse or a cohabiting partner for one-person businesses or of partners determines an identical additional employers contribution due for the activity of each one of such members. Innovations in extending social insurance coverage to independent workers 73 category of ―social Monotributo‖, the workers included on the National Register of Promoters of Local Development and Social Economy of the Ministry of Social Development are exempt from contributing to the retirement pension, and pay 50 per cent of the contribution for social works, U35 by registration holder, and the same amount for each covered family member.

11.2.8. Type of retirees authorized to register as a contributor tp the Monotributo scheme

Before the reform of the scheme, retirees from industry and trade could not be Monotributo contributors. Now, they are eligible for coverage in the following cases: 1 If the retiree was a bank employee, a notary, a military or a police officer, he may register in the Monotributo scheme regardless of the amount of the benefit he receives from his Fund, because the benefit he receives is not borne by the BPS. 2 Should he be a BPS retiree, he may register in the following situations: retiree by civil and rural contribution, and by domestic service. In such cases, neither the amount nor the type of received benefit is relevant, since it is a benefit for an activity borne by the BPS, but with a different registration from industry and trade. 3 In case the retiree has worked in the industry or trade, and he is the owner of a common retirement or retirement due to old age, he may register, provided that the activity he has retired from is not the same activity he wishes to develop in the Monotributo scheme, and that he simultaneously fulfils the following obligations: i to own a retirement pension not exceeding three Benefits and Contributions Bases BPC, and ii to integrate a family household in which each members average income does not exceed three BPC. All incomes are considered to this end, with the exception of those generated by Citizens Incomes, Family Benefits, and Unemployment Insurances motivated by the workers dismissal. 4 Retirees who wish to register in the Monotributo scheme may do so as a one-person business owner, a co-working spouse or cohabiting partner, or as a partner in a partnership company, provided heshe meets all the general conditions. Table 17, below, summarizes the changes introduced in the Monotributo scheme. Table 19. Uruguay: Summary of changes to the Monotributo scheme Variable Previous conditions according to Law 17.296, of 210201, and complementary legislation Current conditions according to Law 18.083 of 271206, and complementary legislation

1. Type of allowed companies

One-person businesses with a small economic size, with a maximum number of four workers including the owner of the one-person business, and heher co-working spouse or cohabiting partner, when applicable. One-person businesses with or without co-working spousecohabiting partner with only one dependent worker. “De facto” non-family companies formed by a maximum of two partners, without dependents. “De facto” family companies with affinities up to the 4th degree of consanguinity or up to the 2nd degree, provided they do not exceed three partners, and with no dependents. All of them having a small economic size. The Executive Power has the possibility to include up to three dependents in the previous definitions in the case of seasonal or fixed activities.