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NEWS AND BULLETINS

TAX REFORMS UNDER THE PUBLIC INTEGRITY LAW AND REGULATIONS FOR THE APPLICATION OF TAX REMISSION

By Tobar ZVS en TAX CONSULTANCY .

On June 26, 2025, through Official Registry No. 68, the Organic Law of Public Integrity was published, introducing significant changes in the tax framework. Below, we outline the key points:

 

  • Reduction of Interest Payments in Refund Processes:

    Interest in favor of the taxpayer will be calculated from the date the refund request is submitted until the issuance of the resolution. Additionally, a 50% reduction is applied to the 90-day reference active interest rate established by the Central Bank of Ecuador. Prior to the reform, applied a 100% rate.

 

  • 100% Remission of Interest, Penalties, Legal Costs, and Surcharges Imposed by the Internal Revenue Service (IRS):

    An exceptional regime is established for the remission of 100% of interest, penalties, legal costs, and surcharges applicable to tax obligations whose taxable event occurred on or before December 31, 2024. To benefit from this regime, the taxpayer must pay the full amount of the principal debt. This provision applies exclusively to taxes administered and collected by the IRS, expressly excluding income tax for the 2024 fiscal year.

 

Subsequently, on June 27, 2025, through Resolution No. NAC-DGERCGC25-00000015, the IRS issued the regulations for the application of the remission of interest, penalties, legal costs, and surcharges administered by the institution:

 

  1. Which Obligations are not Subject to Remission?

    The following obligations are expressly excluded from the remission benefit:

     

    • Income tax corresponding to the 2024 fiscal year.

    • Obligations collected but not administered by the IRS.

    • Obligations that do not result in a tax payable.

    • Penalties arising from sanctioning procedures.

    • Amounts resulting from undue tax refunds.

     

  2. Deadline to Apply for the Benefit

    To take advantage of this incentive, taxpayers must pay the outstanding principal debt by December 31, 2025.

     

  3. How Does the Remission Apply to Prior and Partial Payments?

     

    Partial payments made by taxpayers will be applied as follows:

     

    • Payments made up to June 25, 2025, shall be applied in the following order: first to interest, then to the tax, and finally to penalties, in accordance with Article 47 of the Tax Code.

    • Payments made between June 26 and December 31, 2025, shall be applied directly to the principal.

    • Payments made after December 31, 2025, shall be governed by Article 47 of the Tax Code.

     

    Once the remission period ends, the Tax Administration will update any outstanding obligations based on the established criteria, respecting the partial payments made during the applicable period.

     

  4. Enforcement Proceedings

    Full payment of the principal will result in the closure of the enforcement process. If there are ongoing judicial proceedings, any precautionary measures in place will be revoked.

     

  5. Remission in Settlement Processes


    Remission will apply to tax obligations included in mediation agreements, provided that the full amount of the principal is paid within the established deadline. The IRS will notify the mediation centers of the extinguishment of the obligation and proceed to close the case.

     

  6. Taxes on Automotives


    Prior to full payment of the principal by December 31, 2025, the IRS will automatically apply remission to the following taxes:

    • Annual tax on motor vehicle ownership, applicable to obligations generated up to the 2024 fiscal period.

    • 1% tax on the sale of used vehicles, for contracts legalized on or before December 31, 2024.

     

  7. Overpayments

    Previous and/or partial payments that exceed the principal amount are not subject to reimbursement, unless the balance exceeds the value payable outside the remission system.

     

  8. Delegation of Authority and Taxpayer’s Responsibility

    The processing of remission cases is delegated to the IRS’ Zonal and District Directors, according to their territorial jurisdiction.
    It is the taxpayer’s sole responsibility to verify the status of their obligations and the correct application of the benefit through the available IRS’ online services.

 

© 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 DECEMBER 2023 ...

In the month of December, taxpayers must fulfill the following:

Tax Obligations:

  • Declaration of Value Added Tax (VAT). (*)
  • Declaration of Income Tax Withholding. (*)
  • 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 submission 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

 

Corporate Obligations:

  • Payment of the second installment of the annual contribution to the Superintendency of Companies, Securities, and Insurance.
  • Submission of information to the administration by foreign companies, partners, or shareholders.

 

Laboral Obligations:

  • Payment of the thirteenth salary.

 

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

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

IMPLEMENTATION OF THE UNIQUE INCOME TAX FOR SPORTS BETTING OPER ...

As of July 31, 2024, the Internal Revenue Service (SRI) issued Resolution No. NAC-DGERCGC24-00000029 (hereinafter, “Resolution”), establishing that, from July 1, 2024, taxable income from sports betting and prizes paid to players will be subject to a withholding tax at a unique rate of 15%.

 

The Resolution outlines the formal obligations, deadlines, declaration procedures, and registration processes in the Taxpayer Registry required for imposing this Unique Income Tax. 

 

Here is a summary of the key points of the Resolution:

 

  1. Calculation of Tax Withholding

     

    The tax withholding will be calculated on the difference between the amounts of unsuccessful bets and the prizes won by the players monthly. A 15% withholding tax will be charged to such amount.

     

    The total amounts generated by each player must be consolidated monthly and the corresponding receipt must be issued by the fifth business day of the following month.

     

  2. Declaration and payment of withholding taxes

     

    Sports betting operators must declare and pay the withholding of the income tax through the “Declaration of Withholding Income Tax” form.

     

    Monthly declaration and payment deadlines will be determined based on the ninth digit of the Tax ID, as established in the Resolution.

     

    Special taxpayers must file their declarations by the 11th day of the month of expiration, regardless of the ninth digit of the Tax ID.

     

  3. Sales invoices

     

    Sales invoices must be issued electronically to the taxpayer.

     

  4. Value Added Tax (VAT)

     

    • Sports betting operators’ resident: Sports betting operators who are residents will be subject to the applicable VAT regulations.

     

    • Sports betting operators’ non-residents: VAT withholding will be the responsibility of the financial intermediaries or withholding agents unless the operators choose to become perception agents in the regime for digital service imports.

     

  5. Deadline for taxpayer registration

     

    • Sports betting operators’ resident: Sports betting operators must register in the Taxpayer Registry by August 31, 2024.

     

    • Sports betting operators’ non-residents: Sports betting operators must register in the Taxpayer Registry by September 30, 2024.

     

  6. Deadline extension

     

    For a single time, the sports betting operators have until September 6, 2024, to issue the sales receipts and withholding receipts for the month of July.

 

© 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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