Deducibility of remunerations and fees paid to legal representatives of entities

CorralRosales > Bulletin > Deducibility of remunerations and fees paid to legal representatives of entities
Categories Bulletin Posted on Author SOPORTE PUBLITEK Tags Ecuador

On July 20, 2023, the Department of Regulations and Consultations of the General Directorate of the Internal Revenue Service in response to Consultation No. 1170120230744808 issued Official Letter No. 91701202023OCON001932, in which it determines:

  • That according to the Labor Code and Circular No. NAC-DGECCGC22-00000004, issued by the Tax Administration, entities may maintain a labor or civil relationship with their Legal Representative.
  • In the case of Legal Representatives who maintain an employment relationship with the entity, the amounts for wages, salaries and other remunerations will be deductible if the payment of employer contributions to the Ecuadorian Institute of Social Security, is justified.
  • In the case of Legal Representatives who maintain a civil relationship with the entity, the respective fees will be deductible expenses when they are supported by invoices, issued in accordance with tax regulations, therefore, it is not necessary to pay employer contributions to the Ecuadorian Institute of Social Security.

 

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NOTE: The above text has been prepared for informational purposes. CorralRosales is not liable for any loss or damage incurred as a result of acting or failing to act on the basis of the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES

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