Tobar ZVS

NEWS AND BULLETINS

NEW REFORMS FOR VAT WITHHOLDING

In Official Gazette Second Supplement No. 413 of October 10^th, 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).

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.

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).

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

MODIFICATION TO RESOLUTION NR. NAC-DGERCGC16-00000536 OF THE SR ...

Through Resolution No. NAC-DGERCGC22-00000065 the Internal Revenue Service Amends the Resolution No. NAC-DGERCGC16-00000536, published in the supplement to Official Gazette No. 919 of January 10, 2017, in the following terms:

1.	The levels of the corporate composition are defined, as follows: First Level. – The direct relationship of the obligor with its holders or beneficiaries of rights representing capital. Second or Third Level. – The indirect relationship existing between them, according to the number of intermediary companies that exist until reaching the last level of the corporate composition, in which the natural persons that are final beneficiaries and/or tax residents of Ecuador are identified, excluding nominal or formal holders, depending on the business structure of the obligor or the intermediary companies.
2.	The fifth numeral is added with respect to the subjects of last level, establishing a: A non-tax resident company with respect to the corporate chains that, from the same, end in one or several non-tax resident natural persons that, without being mere nominal or formal holders, maintain individually or jointly with their related parties, an effective participation in the capital of the obligated subject of less than 10%. When the corporate chains referred to in the preceding paragraph end in individuals who are tax residents of Ecuador, it will be understood that the latter constitute the last level, without prejudice to their percentage of effective participation in the obligated entity.
3.	On the other hand, regarding the information related to companies that list their shares in stock exchanges, it is established that if the obligated entity has as a shareholder, direct or indirect, a company that lists its shares in recognized stock exchanges abroad: It shall have the obligation to identify the part of the capital that is not traded or that is reserved to a limited group of investors, and with respect to such part of the capital shall report on any shareholder that owns directly or indirectly 2%, or more, of its corporate composition, except in the case of tax residents in Ecuador, in which case it shall report without regard to such percentage.
4.	However, the previous provisions shall not apply when the company that lists its shares in the referred stock exchanges is constituted at the last level of the corporate chain.
5.	Finally, as a Transitory Provision, it is established that the Appendix of Shareholders, Participants, Partners, Members of the Board of Directors and Administrators for the fiscal period 2022, may be filed until March 28, 2023.

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 may not constitute a legal opinion on specific matters. Any particular analysis, shall require legal advice from the Firm.}

By ZVS Tobar in TAX CONSULTANCY

RULES FOR INCOME TAX CREDIT FOR PERSONAL EXPENSES ...

In Resolution No. NAC-DGERCGC2300000020, the Internal Revenue Service (SRI) establishes the rules for applying an Income Tax (IR) reduction for personal expenses.

Parents, spouses, or common-law partners and children up to the age of 21 or with disabilities of any age may be considered as family dependents, provided that they do not receive taxable income and that they are dependent on the taxpayer.
In no case may two or more taxpayers consider the same person as a family dependent for the respective tax period.
Workers must provide the following information on family dependents to their employer.
Copy of the identity card of the spouse, which constitutes evidence of the marriage.
Copy of the identity card of children up to 21 years of age.
Copy of the identity card and disability card of children with disabilities.
Copy of the certificate of suffering from a catastrophic, rare, and / or orphan disease issued by the Ministry of Public Health or the Ecuadorian Institute of Social Security.
To register parents as family dependents, they must give their express consent to be included as a family dependent of the taxpayer and present a copy of the identity card where the family relationship is evidenced.
For the 2023 fiscal year, workers in a dependency relationship may submit a new personal expense projection form in July.
Employers must reassess income tax considering the personal expenses forecast presented by the worker. Likewise, they must make the withholdings for the values adjusted for the payments of salaries and wages related to the month of July.

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

This article contains information of general interest and does not constitute legal advice about specific matters. Any particular analysis will require the Firm’s legal advice.

By ZVS Tobar in TAX CONSULTANCY

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:

(**) 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).

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

MODIFICATION TO RESOLUTION NR. NAC-DGERCGC16-00000536 OF THE SR ...

1.	The levels of the corporate composition are defined, as follows: First Level. – The direct relationship of the obligor with its holders or beneficiaries of rights representing capital. Second or Third Level. – The indirect relationship existing between them, according to the number of intermediary companies that exist until reaching the last level of the corporate composition, in which the natural persons that are final beneficiaries and/or tax residents of Ecuador are identified, excluding nominal or formal holders, depending on the business structure of the obligor or the intermediary companies.
2.	The fifth numeral is added with respect to the subjects of last level, establishing a: A non-tax resident company with respect to the corporate chains that, from the same, end in one or several non-tax resident natural persons that, without being mere nominal or formal holders, maintain individually or jointly with their related parties, an effective participation in the capital of the obligated subject of less than 10%. When the corporate chains referred to in the preceding paragraph end in individuals who are tax residents of Ecuador, it will be understood that the latter constitute the last level, without prejudice to their percentage of effective participation in the obligated entity.
3.	On the other hand, regarding the information related to companies that list their shares in stock exchanges, it is established that if the obligated entity has as a shareholder, direct or indirect, a company that lists its shares in recognized stock exchanges abroad: It shall have the obligation to identify the part of the capital that is not traded or that is reserved to a limited group of investors, and with respect to such part of the capital shall report on any shareholder that owns directly or indirectly 2%, or more, of its corporate composition, except in the case of tax residents in Ecuador, in which case it shall report without regard to such percentage.
4.	However, the previous provisions shall not apply when the company that lists its shares in the referred stock exchanges is constituted at the last level of the corporate chain.
5.	Finally, as a Transitory Provision, it is established that the Appendix of Shareholders, Participants, Partners, Members of the Board of Directors and Administrators for the fiscal period 2022, may be filed until March 28, 2023.

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

By ZVS Tobar in TAX CONSULTANCY

RULES FOR INCOME TAX CREDIT FOR PERSONAL EXPENSES ...

In Resolution No. NAC-DGERCGC2300000020, the Internal Revenue Service (SRI) establishes the rules for applying an Income Tax (IR) reduction for personal expenses.

Parents, spouses, or common-law partners and children up to the age of 21 or with disabilities of any age may be considered as family dependents, provided that they do not receive taxable income and that they are dependent on the taxpayer.
In no case may two or more taxpayers consider the same person as a family dependent for the respective tax period.
Workers must provide the following information on family dependents to their employer.
Copy of the identity card of the spouse, which constitutes evidence of the marriage.
Copy of the identity card of children up to 21 years of age.
Copy of the identity card and disability card of children with disabilities.
Copy of the certificate of suffering from a catastrophic, rare, and / or orphan disease issued by the Ministry of Public Health or the Ecuadorian Institute of Social Security.
To register parents as family dependents, they must give their express consent to be included as a family dependent of the taxpayer and present a copy of the identity card where the family relationship is evidenced.
For the 2023 fiscal year, workers in a dependency relationship may submit a new personal expense projection form in July.
Employers must reassess income tax considering the personal expenses forecast presented by the worker. Likewise, they must make the withholdings for the values adjusted for the payments of salaries and wages related to the month of July.

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

This article contains information of general interest and does not constitute legal advice about specific matters. Any particular analysis will require the Firm’s legal advice.

By ZVS Tobar in TAX CONSULTANCY

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:

(**) 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).

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

MODIFICATION TO RESOLUTION NR. NAC-DGERCGC16-00000536 OF THE SR ...

1.	The levels of the corporate composition are defined, as follows: First Level. – The direct relationship of the obligor with its holders or beneficiaries of rights representing capital. Second or Third Level. – The indirect relationship existing between them, according to the number of intermediary companies that exist until reaching the last level of the corporate composition, in which the natural persons that are final beneficiaries and/or tax residents of Ecuador are identified, excluding nominal or formal holders, depending on the business structure of the obligor or the intermediary companies.
2.	The fifth numeral is added with respect to the subjects of last level, establishing a: A non-tax resident company with respect to the corporate chains that, from the same, end in one or several non-tax resident natural persons that, without being mere nominal or formal holders, maintain individually or jointly with their related parties, an effective participation in the capital of the obligated subject of less than 10%. When the corporate chains referred to in the preceding paragraph end in individuals who are tax residents of Ecuador, it will be understood that the latter constitute the last level, without prejudice to their percentage of effective participation in the obligated entity.
3.	On the other hand, regarding the information related to companies that list their shares in stock exchanges, it is established that if the obligated entity has as a shareholder, direct or indirect, a company that lists its shares in recognized stock exchanges abroad: It shall have the obligation to identify the part of the capital that is not traded or that is reserved to a limited group of investors, and with respect to such part of the capital shall report on any shareholder that owns directly or indirectly 2%, or more, of its corporate composition, except in the case of tax residents in Ecuador, in which case it shall report without regard to such percentage.
4.	However, the previous provisions shall not apply when the company that lists its shares in the referred stock exchanges is constituted at the last level of the corporate chain.
5.	Finally, as a Transitory Provision, it is established that the Appendix of Shareholders, Participants, Partners, Members of the Board of Directors and Administrators for the fiscal period 2022, may be filed until March 28, 2023.

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

By ZVS Tobar in TAX CONSULTANCY

RULES FOR INCOME TAX CREDIT FOR PERSONAL EXPENSES ...

In Resolution No. NAC-DGERCGC2300000020, the Internal Revenue Service (SRI) establishes the rules for applying an Income Tax (IR) reduction for personal expenses.

Parents, spouses, or common-law partners and children up to the age of 21 or with disabilities of any age may be considered as family dependents, provided that they do not receive taxable income and that they are dependent on the taxpayer.
In no case may two or more taxpayers consider the same person as a family dependent for the respective tax period.
Workers must provide the following information on family dependents to their employer.
Copy of the identity card of the spouse, which constitutes evidence of the marriage.
Copy of the identity card of children up to 21 years of age.
Copy of the identity card and disability card of children with disabilities.
Copy of the certificate of suffering from a catastrophic, rare, and / or orphan disease issued by the Ministry of Public Health or the Ecuadorian Institute of Social Security.
To register parents as family dependents, they must give their express consent to be included as a family dependent of the taxpayer and present a copy of the identity card where the family relationship is evidenced.
For the 2023 fiscal year, workers in a dependency relationship may submit a new personal expense projection form in July.
Employers must reassess income tax considering the personal expenses forecast presented by the worker. Likewise, they must make the withholdings for the values adjusted for the payments of salaries and wages related to the month of July.

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

This article contains information of general interest and does not constitute legal advice about specific matters. Any particular analysis will require the Firm’s legal advice.

By ZVS Tobar in TAX CONSULTANCY

¡Manténte informado!

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