Author Archives: SOPORTE PUBLITEK

The Executive Decree 313 issued June 27, 2024, by the President of the Republic of Ecuador regulates the Unique Income Tax for Sports Betting Operators. Below are the key points summarized:

1. Assessment and payment of the tax: Taxpayers parties must declare and pay the tax monthly. Sports operators with tax residence in Ecuador must file an annual tax form consolidating the amounts declared monthly.
2. Taxable Base: It is equal to the total income generated, including commissions, minus total paid prizes, provided that 15% tax was withheld from these prizes at the time of payment.
3. Tax Rate: A flat rate of 15% applies to the taxable base.
4. Withholding: Prizes paid by resident and non-resident operators are subject to a 15% withholding. The prize is the amount the player is entitled to when their prediction is correct, excluding the accrued forecast, i.e., the amount wagered by the player.
5. Receipts: Resident or non-resident operators must issue sales receipts. One sales receipt per player per sporting event may be issued. Regarding withholding, one withholding receipt may be issued for all prizes awarded to the same player during the month.
6. Implementation Period: Operators have 6 months to adjust their systems and implement the necessary mechanisms to comply with the applicable formal obligations.
7. Non-resident Operators: Non-resident operators must obtain their Unique Taxpayer Registry (RUC). Obtaining a tax ID in Ecuador does not imply that operators have a permanent establishment in the country. However, the Ecuadorian representative must retain supporting information for 7 years.

The Customs Authority (SENAE) issued Bulletin 71-2024 on April 12, informing foreign trade operators of the codes to be applied in the import of the following goods to avoid the payment of VAT and Excise Tax:

1.    Unmanned aerial vehicle (Drone)

Drones or unnamed aerial vehicles do not meet the definition of airplanes, light aircrafts, and helicopters; therefore, the import of this goods is not subject to Excise Tax.

When importing this type of goods, the release code 5779 must be included in the customs declaration.

2.    Animals for human consumption

The import of purebred breeding stock is taxed at 0% VAT rate when destined for human consumption at the end of their productive cycle, being slaughtered and commercialized as meat.

When importing this type of merchandise, the release code 0613 must be included in the customs declaration.

3.    Electric vehicles

The import of electric vehicles for private use, public transportation, and cargo is taxed at 0% VAT rate and is not subject to Excise Tax, provided they are duly homologated and registered by the National Transit Authority.

Electric vehicles are defined as those powered solely by electric energy sources and which battery charge uses exclusively this type of energy, producing zero direct polluting emissions. Those with self-generation systems with an internal combustion source, are not considered electric vehicles regardless of their configuration.

To apply the 0% VAT rate, the release code 0753 must be included in the customs declaration. And, to avoid the payment of Excise Tax, the code 5774 must be included.

If the releasing codes have not been registered during the import, the importer is entitled to request a refund of the amounts paid for these taxes.

In the following link you can review the complete text of the Bulletin: LINK

By Resolution No. 036 of February 28, 2024, published in Official Registry 521 on March 19, 2024, the Attorney General of the State issued the new Regulations to the Mediation Center of the Attorney General’s Office (the “Regulations”).

The key points of the Regulations are summarized below:

1.    The Mediation Center (the “Center”) of the Attorney General’s Office (“PGE”) will exclusively provide its services for the resolution of conflicts between: (i) public entities; (ii) public and private entities; (iii) public entities and individuals; and (iv) private entities exercising public activities by delegation, concession, authorization, or financing, and entities or individuals.

2.    The Mediation Advisory Board (the “Board”) has been established. It will consist of the Attorney General of the State or his delegate, the Legal National Director of PGE, and the Center Director. The Attorney General of the State will chair the Board.

3.    The Board is empowered to issue: (i) interpretative resolutions of the Regulations, (ii) amendments to the Regulations, and (iii) guidelines, instructions, and manuals for the Center’s operation.

4.    PGE will only call upon external mediators when: (i) the case is exceptionally complex; (ii) the parties require assistance in understanding the conflict and its potential solutions due to the technical and specialized nature of the case; (iii) there is a high workload; or (iv) if there is only one mediator in any of the PGE offices and that mediator has recused himself.

5.    Legal advisors may accompany the parties during mediation hearings. However, the mediator has the discretion to determine how they will participate.

6.    Mediation is confidential unless the parties agree otherwise.

7.    The parties may agree to conduct all or part of the mediation process through electronic means.

8.    Mediation procedures will be limited to a maximum of two years, which can be extended up to 180 days upon the parties’ request and the Center Director’s approval.

9.    If the agreed amount is over US$5,000.00, the paying party must confirm that the funds used to fulfill the obligation are legal.

10.    The parties may request to reopen a mediation process if it ended without agreement or with partial agreement.

11.    Mediation processes initiated before the Regulation’s effective date will continue under the previous regulation.