Monthly Archives: August 2023

On August 23, 2023, President Guillermo Lasso issued Executive Decree No. 850, which contains the General Regulations of the Organic Law on Communication. In the main, the new Regulation:

• Incorporates the rules for the self-regulation of the media.
• Determines the rules for the operation of the Information and Communication Development and Promotion Council.
• Creates the Mechanism for the prevention and protection of journalistic work, as a state technical instance in charge of adopting measures for this purpose. The mechanism is made up of the Ministries of Defense, the Interior, Foreign Affairs and Human Mobility, Women and Human Rights, the Risk Management Secretariat, the State Attorney General’s Office, a representative of the media workers private, public and community communication and a representative of civil society.
• Modulates the prohibition of dissemination of imported advertising established in article 98 of the Organic Law of Communication, by determining that advertising produced in member countries of the integration treaties and agreements to which Ecuador is a party, will have the quality of national. This implies that the  dissemination of advertising produced in the member countries of the Andean Community of Nations, CAN, (Colombia, Peru and Bolivia) is allowed; and MERCOSUR (Argentina, Brazil, Paraguay, Uruguay, Chile, Colombia, Guyana, Peru and Suriname) is allowed.
• Prohibits the dissemination of advertising of any type of betting or sports prediction systems.

The General Regulations to the Organic Law of Communication will enter into force from its publication in the Official Gazette, which has not happened until the moment of publication of this bulletin.

Ana Samudio, Senior associate at CorralRosales
asamudio@corralrosales.com
+593 2 2544144

The Regulation CPT-RES-2023-00-1 issued on July 31, 2023, by the Tax Policy Committee (hereafter the “CPT“) amended the list of raw materials and capital goods which importation is subject to Foreign Exchange Tax (ISD) but may be used as a tax credit for the payment of Income Tax.

The following link shows the subheadings that are included and those that are excluded from the list:

CPT-RES-2023-001

The inclusion of subheadings is effective as of January 1st, 2023, and the exclusion of subheadings is effective as of August 1st, 2023.

Specialist in Tax Law
Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

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.

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

Resolution SENAE-SENAE-2023-0043-RE issued on July 19, 2023, and published in Official Gazette Supplement 362 of July 27, 2023, the National Customs Service of Ecuador established new regulations for the importation of goods under the exception regime for household goods and work equipment.

The most important reforms include:

1. Alcoholic beverages are admissible if it does not exceed 50 liters in total and 2 liters for each commercial brand.
2. Collectible goods that are not restricted according to the following list are admissible: https://www.aduana.gob.ec/gaceta-resolucion/SENAE-SENAE-2021-0131-RE/
3. If the imported goods are not properly identified or do not match with the data registered in the list of goods subject to the exception regime, the returning migrant or foreigner will be subject to the payment of a fine. However, this will not prevent the importation process from continuing under the exception regime.
4. The returning migrant or foreigner may reimport the household goods and work equipment that was definitively exported under the reimportation regime in the same condition. This regime is exempt from the payment of foreign trade taxes. The re-importation must be carried out within a period of 2 years from the date of shipment of the goods.
5. The percentage of goods subject to prior inspection is reduced from 30% to 15%. The customs operating technician is able to review only 15% of the total amount of goods imported by the returning migrant.
6.  For the import of used or new vehicles of the returning migrant, the following supporting documents may be attached to the customs declaration: i) the exports customs declaration made in the country of departure where the value of the vehicle is stated; or, ii) the certificate issued by the dealer or commercial house detailing the value of the vehicle.
7. When the declared price for vehicles and motorcycles of the returning migrant is lower than the minimum values established by the Customs Authority, the Authority shall initiate a reasonable doubt procedure for the returned migrant to justify the price.
8. Only foreign migrants may maintain the benefit of the exception regime when the interruption of their residence does not exceed 180 days as long as it is due to labor reasons.

The new regulations are effective from the date of publication in the Official Gazette, that is, from July 27, 2023. However, the new regulations will not be applicable to imports shipped prior to their publication in the Official Gazette, unless it benefits the migrant.

In the following link you can review the complete text of the Resolution:

https://www.aduana.gob.ec/gaceta-resolucion/SENAE-SENAE-2023-0043-RE/