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The Internal Tax Regime Law establishes that employees may obtain a reduction in income tax based on their estimated personal expenses for the fiscal year.
The categories of deductible personal expenses are housing, health, food, clothing, tourism, and education, including in this last category the concepts of art and culture.
Employees whose annual income exceeds USD 12,208.00 must submit to their employer, during the month of February of each year, a projection of their personal expenses for the calculation of monthly income tax withholding.
As employers are required to withhold income tax from their employees on a monthly basis, it is recommended that employees be informed of this requirement and provided with the corresponding form.
For more information or tax and labor advice, please contact Tobar ZVS at laboral @ 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.