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In Official Gazette Second Supplement No. 413 of October 10th, 2023, was published the Resolution No. NAC-DGERCGC23-00000026, amended the Resolution No. DGERCGC20-00000061 through which the percentages of Value Added Tax (VAT) withholding are regulated.

Here is what you should know about the Resolution: 

  • Entities and organizations of the Central and Decentralized Government, their decentralized units, public enterprises, universities, and polytechnic schools of the country will be considered VAT withholding agents.

  • No VAT withholding shall be made to:
    1. Companies incorporated for the development of public projects under the public-private partnership modality, under certain conditions.

    2. Individuals and companies categorized as entrepreneurs within the Simplified Regime for Entrepreneurs and Popular Businesses (RIMPE) if the payment is made through credit cards, debit cards, electronic transfers, or any other electronic payment method, even when the payment is processed by a national financial institution, a credit or debit card issuing company, and/or a payment aggregator.
  • Taxpayers considered habitual exporters of goods and/or services, who are classified by the IRS as withholding agents or special taxpayers, will retain 100% of VAT, even for those classified as special taxpayers or withholding agents, on all their acquisitions, except in the cases provided in the Resolution.

For more information, do not hesitate to contact our Tax Practice Partner, Iván García (igarcia@tzvs.ec).

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This publication contains information of general interest and does not constitute legal opinion on specific issues. Any analysis will require legal advice from the Firm.