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NEWS AND BULLETINS

TAX OBLIGATIONS – JULY 2024

By Tobar ZVS en TAX CONSULTANCY .

In the month of July, taxpayers must comply with the following tax obligations:

 

  • Payment of Urban Property Tax:

 

Starting on July 1st, the urban property tax must be paid in the Municipality where the real estate is located, with a 10% surcharge on the tax value.

 

  • Submission of Tax Compliance Report:

 

Audited taxpayers must submit the Tax Compliance Report and its corresponding annexes for the fiscal year 2023 by audited taxpayers between July 10 and 28 according to the ninth digit of the Unique Taxpayer Identification Number.

 

  • Foreign Exchange Tax Return- Exporters:

 

The Tax Return and Payment of the Foreign Exchange Tax must be made by taxpayers who did not return the foreign exchange generated in exports of goods and services during 2023, as follows:

 

    • Special taxpayers by the 11th day.

    • Public sector by the 20th day.

    • Taxpayers domiciled in Galapagos by the 28th day.

    • Other taxpayers according to the ninth digit of the Unique Taxpayer Identification Number starting from the 10th day.

 

  • Semi-Annual VAT Return:

 

The Semi-Annual VAT Return must be submitted as follows:

 

    • Special taxpayers by the 11th day.

    • Public sector by the 20th day.

    • Taxpayers domiciled in Galapagos by the 28th day.

    • Other taxpayers according to the ninth digit of the Unique Taxpayer Identification Number starting from July 10th.

 

  • Semi-Annual VAT Return for Entrepreneurs:

 

Entrepreneurs subject to the RIMPE regime must submit the Semi-Annual VAT Return between July 10 and 28 according to the ninth digit of the Unique Taxpayer Identification Number.

 

  • Transfer to the Credit Data Registry:

 

Companies under the control and supervision of the Superintendence of Companies, Securities, and Insurance that conduct credit sales with or without interest, must transfer the information on such sales to the Credit Data Registry by July 10th, which is part of the National Public Data Registry.

 

  • Payment of Motor Vehicle Tax:

 

Owners of private vehicles with license plates ending number in 6 must pay the Motor Vehicle Tax to the financial institutions authorized by the IRS by July 31st.

 

  • Presentation of Equality Plans:

 

The Ministry of Labor extended the deadline for the submission of the Equality Plans required by the Organic Law of Violet Economy until July 31, 2024.

 

Companies obliged to develop equality plans must include in the Equality Plan the creation of the Specialized Committee, or the designated person or position, for the monitoring, evaluation and periodic review of the Plan. In addition, they must disseminate and socialize the Equality Plan with all their collaborators, in order to ensure that it is implemented.

 

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

 

© TobarZVS 

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.

RELATED ARTICLES

TAX OBLIGATIONS FOR OCTOBER 2023 ...

In the month of October, taxpayers are required to fulfill the following tax obligations:

  • Declaration of Value Added Tax (VAT). (*)
  • Declaration of withholding tax on income. (*)
  • Declaration of Outflow Tax (ISD). (*)
  • Declaration and Annex of Special Consumption Tax (ICE). (*)
  • Annex International Currency Movement (MID). (*)
  • Simplified Transactional Annex (ATS). (**)
  • Annex to the Report on Operations and Financial Economic Transactions (ROTEF).
  • Foreign Assets Tax Declaration.
  • Commercial Registrar Annex (REM).
  • Notary Annex (NOT).
  • Property Registrar Annex (REP).

Notes:

(*) Special taxpayers must submit and pay their declarations by the 11th day of each month, while other taxpayers will follow the ninth digit of their Taxpayer Identification Number (RUC). If the submission date falls on mandatory rest days or holidays, it will be moved to the next working day.

(**) The maximum submision date will be the following month based on the ninth digit of the RUC as follows:

 

Ninth digit of the RUC

Due date

1

10

2

12

3

14

4

16

5

18

6

20

7

22

8

24

9

26

0

28

 

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

 

© TobarZVS 

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.

By ZVS Tobar in TAX CONSULTANCY

ORGANIC LAW TO CONFRONT INTERNAL ARMED CONFLICT, SOCIAL, AND EC ...

On March 12, 2024, the Organic Law to Confront Internal Armed Conflict, Social, and Economic Crisis, was published in Official Gazette Supplement No. 516. which proposes tax reforms outlined below:

  • Value Added Tax – VAT

 

    • The VAT is permanently increased from 12% to 13%, with the possibility for the President of the Republic to modify this rate up to 15% prior to favourable opinion from the public finance regulatory body.

    • A 5% VAT rate is established for construction materials.

 

  • Temporary Security Contribution – TSC

The Temporary Security Contribution (TSC) is established for corporations and permanent establishments that have earned taxable income during the fiscal year 2022, excluding banks, savings and credit cooperatives, micro, and small businesses.

The taxable base for calculating the TSC will be the profits subject to income tax for the fiscal year 2022, to which a rate of 3.25% will be applied. This contribution must be declared and paid by March 31, 2024, and 2025.

In case of non-payment of the TSC taxpayers will be sanctioned with a fine equivalent to 3% of the generated obligation for each month or fraction thereof, regardless of the corresponding surcharge and interest.

The payment of the TSC will not be deductible from income tax, nor will it be subject to payment facilities.

  • Temporary Contribution on Profits for Banks and Savings and Credit Cooperatives

This contribution is aimed at banks and savings and credit cooperatives that have had taxable profits during the fiscal year 2023. The taxable profits will serve as the basis for applying the rate, as outlined in the following table:

Group

Taxed profit

Fee

Group 1

Less than a USD 5’000.000,00

5%

Group 2

More than USD 5’000.000,00 to USD 10’000.000,00

10%

Group 3

More than USD 10’000.000,00 to USD 50’000.000,00

15%

Group 4

More than USD 50’000.000,00 to USD 100’000.000,00

20%

Group 5

More than USD 100’000.000,00

25%


The declaration and payment of this contribution must be made by May 31, 2024.

The payment of the contribution on profits for banks and savings and credit cooperatives will not be deductible from income tax, nor will it be subject to payment facilities.

  • Foreign Currency Exit Tax

The percentage to apply is increased from 3.50% to 5%.

The President of the Republic may modify the ISD rate through executive decree, it cannot exceed 5%, as stipulated in Article 162 of the Tax Equity Reform Law.

© TobarZVS 

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.

By ZVS Tobar in TAX CONSULTANCY

TAX OBLIGATIONS – MAY 2024 ...

In the month of May, taxpayers must comply with the following tax obligations:

Monthly Obligations

  • Value Added Tax Declaration – IVA. (*)
  • Withholding Tax Declaration. (*)
  • Exit Tax on Dividends Declaration. (*)
  • Declaration and Annex of Tax on Special Consumptions – ICE. (*)
  • Simplified Transactional Annex – ATS. (**)
  • Annex Report of Operations and Financial Economic Transactions – ROTEF. (**)
  • International Currency Movement Annex – MID. (*)
  • Tax on Assets Abroad Declaration. (*)
  • Mercantile Registrars Annex – REM.
  • Notaries Annex – NOT.
  • Property Registrars Annex – REP.

Annual Obligations

  • Dividend Annex – ADI.
  • Annex of Non-Resident Financial Accounts – CRS.
  • Asset Declaration Annex.
  • RIMPE Popular Business Income Tax Declaration.
  • Urban Property Tax Payment (Guayaquil).
  • Registration of Profit Sharing Payment.
  • External Audit Report.
  • Payment of the 1.5 per mil tax on assets.
  • Patent Tax Payment.

Considerations:

(*) Special taxpayers must submit and pay their declarations until the 11th day, while other taxpayers will adhere to the ninth digit of their tax identification number – RUC. If the filing date coincides with mandatory rest days or holidays, it will be moved to the next business day.

(**) The maximum filing date will be the following month corresponding to the information according to the ninth digit of the RUC.

 

Ninth digit of RUC

Due date

1

10

2

12

3

14

4

16

5

18

6

20

7

22

8

24

9

26

0

28

 

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

 

© TobarZVS 

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.

By ZVS Tobar in TAX CONSULTANCY

REAL ESTATE PROJECT VAT REFUND PROCESS ...

On May 28th, 2024, the INTERNAL REVENUE SERVICE issued the Resolution No. NAC-DGERCGC24-00000019, which established the process for the refund of VAT paid by companies and individuals on local purchases or imports of goods and services for the construction of real estate projects.

 

The amount subject to this refund will be the VAT generated by local purchases or imports of goods and services made from January 1st 2024, that does not exceed the 6.5% of the total referenced cost of the project indicated by the taxpayer in the documents registered before the MIDUVI or IRS.

 

Beneficiaries must request the VAT refund on a monthly basis and for each project. Additionally, they must comply with the process of pre-validation virtually through the SRI’s institutional portal or through the SRI’s on-site windows.

 

The following documentation shall be attached to the beneficiary’s first application:

 

  • The registration of the real estate project before the MIDUVI or IRS if the real estate project is their own housing and does not exceed two projects per year.

  • Copy of the construction permit granted by the Municipal Authority where the real estate project is developed.

  • The pre-validation report of sales vouchers, downloaded from the IRS website.

  • The list of physical and electronic sales vouchers, which support the total value of VAT declared by the beneficiary.. If required, the vouchers must be registered in the “Simplified Transaction Annex”.

 

Certification letter for the information in case the information is entered digitally, subscribed by the applicant, according to the format provided in the SRI.

 

© TobarZVS 

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.

By ZVS Tobar in TAX CONSULTANCY

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