Ruling 878-20-JP/24 – Maternity leave in cases of death of children

On March 11, 2024, The Constitutional Court issued the ruling 878-20-JP/24, which analyzes the Maternity Leave in case of death of children, from which we highlight:

  • The Court analyzes the scope of maternity leave, with the premise that pregnant women have the right to prioritized protection and care of their integral health during pregnancy, childbirth and postpartum.
  • The postpartum or puerperium is the stage in which the body progressively recovers from the physical and psychological changes that have occurred, to return to its pre-pregnancy condition. This varies for each person.
  • The Court concludes that it is not appropriate to suspend maternity leave due to the death of the newborn child, based on the argument that the reason for the leave has disappeared ignoring the need for the woman’s recovery.
  • It argues that suspending maternity leave on the assumption that its sole purpose is to care for the children, would perpetuate the gender stereotype that assigns to women the role of primary caregiver in the family nucleus. And resolves that every working woman has the right to the full enjoyment of her maternity leave, despite the death of her child.

 

María Victoria Beltrán, Senior Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Extension for Equality Plans registration

On July 29, 2024, the Ministry of Labor issued the Ministerial Agreement No. MDT-2024-099, which extends the deadline for the registration of “Equality Plans” until July 31, 2025.

 

María Victoria Beltrán, Senior Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Donation of equipment to the Police for applying tax benefits

Through Official Letter DADM-MP-01, the Ministry of Home Affairs issued the “Donation Process Manual”, which regulates the process to donate equipment and supplies to the National Police and access the 150% additional deduction for the calculation of income tax.

Article 10 of the Internal Tax Regime Law provides an additional deduction of 150% on the taxable base of income tax for donations of equipment and supplies to the National Police, aimed at protecting public order.

According to the Manual, the donor must meet the following general requirements:

  1. Not be subject to legal prohibitions for contracting with the Government.
  2. Have an “active” status in the Single Taxpayer Registry.
  3. Be the owner, possessor, manufacturer, or buyer of the equipment and supplies to be donated.

The donation request must include the following documents:

  1. Declaration of the legality of funds in the format provided in the Manual.
  2. Letter of intent to donate, which should include the general data of the donor and the technical specifications of the equipment or supplies to be donated.

In the case of weapons, ammunition, explosives, and accessories, the corresponding permits must be attached, and the import documentation if applicable.

In the case of used equipment and supplies (tangible or intangible), a report must be attached that establishes the state of the used good, its conditions, and useful life.

 

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Amendments to the Public Procurement Law Regulations

Through Executive Decree 333 of July 12, 2024, published in the Third Supplement of the Official Registry 600 on July 15, 2024, the Public Procurement Law Regulations (the “Regulations“) were amended.

The key amendments are summarized below:

  1. The contracting of Ecuador’s tourism promotion is included as a special regime. Under this regime, the following may be contracted: (i) supply and demand studies; (ii) advertising; (iii) organization, logistics, and assistance for events and fairs; (iv) creation of tourism promotion campaigns; and (v) promotion and positioning of the country brand (Marca País).
  2. A legal entity with its main office in the canton, province, or region where the contract will be executed is considered a local supplier.
  3. If the contractor is an obligated subject before the Financial and Economic Analysis Unit (UAFE), it must hold a Certificate of Compliance from the UAFE during the contractual execution phase.
  4. The study of technological disaggregation in works applies only when the reference budget is equal to or exceeds the amount resulting from multiplying the coefficient 0.00003 by the State’s initial budget for the corresponding fiscal year. For 2024, such amount is US$998,904.59.
  5. Public entities may acquire domestic and international airline tickets under any of the following mechanisms:
  6. Direct purchase from airlines.
  7. Direct purchase from airlines using business or corporate plans.
  8. Direct purchase through online ticket platforms.

Through travel agencies, if deemed appropriate for technical and operational reasons.

 

Mario Fernández, Associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Circular Economy

The circular economy system seeks to keep materials in supply chains for as long as possible, in order to minimize product waste, promote sustainable use of natural resources, revalue waste and regenerate nature.

The circular economy emerges to replace the linear economy (take-make-waste), which is a production model that extracts virgin raw materials to manufacture products that eventually end up as waste.

Since 2021, Ecuador has enacted the Inclusive Circular Economy Law. This legislation establishes mechanisms for transitioning from a linear economy to an inclusive circular economy. It recognizes waste as a potential economic resource and aims to economically integrate waste pickers.

The transition to a circular economy is led by the Secretariats of Production and Environment through the National Inclusive Circular Economy System.

Extended producer responsibility

Extended Producer Responsibility (EPR) is a policy requiring producers or importers to manage a product throughout its entire life cycle, including the post-consumer stage. The Inclusive Circular Economy Law mandates the implementation of EPR schemes for designated priority products.

The collection, classification and recycling processes of EPR contribute significantly to material circularity, making it a pivotal tool that serves as a cornerstone of the circular economy.

In Ecuador, this policy has been implemented for over 10 years for specific products such as tires, batteries, electronic waste, medication waste, among others. The National Inclusive Circular Economy System must determine the priority products for the extended producer responsibility scheme.

 

Verónica Manrique, Junior Associate Lawyer at CorralRosales
veronica@corralrosales.com
+593 2 2544144

Felipe-Samaniego-abogados-ecuador

Felipe Samaniego, Partner at CorralRosales
felipe@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Income Tax for Sports Betting Operators

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.

 

Andrea-Moya-abogados-ecuador

Andre Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Penalties for failure to deliver and transmit sales receipts

Resolution NAC-DGERCGC24-00000022 issued by the Internal Revenue Service (SRI) on June 6, 2024, and published in the Official Gazette 575 on June 10, 2024, regulates the penalties applicable for failure to deliver and transmit sales receipts.

It is the taxpayer’s obligation to issue sales receipts and transmit them at the time of issuance or within a maximum period of 72 hours. Non-compliance with these obligations is subject to the following penalties:

Characteristics of the taxpayer (as of the date of the offense) Failure to deliver sales receipts (RBU = US$460 for 2024) Failure to transmit electronic sales receipts to the SRI (RBU US$460 for 2024) Large taxpayer and large estates 20 RBU (US$9,200) 30 RBU (US$13,800) Special taxpayer 10 RBU (US$4,600) 15 RBU (US$6,900) Entities other than non-profits, indivisible estates, and individuals required to keep accounting 7 RBU (US$3,220) 10 RBU (US$4,600) Non-profit entities 4 RBU (US$1,840) 5 RBU (US$2,300) Indivisible estates and individuals not required to keep accounting 4 RBU (US$1,840) 5 RBU (US$2,300) Taxpayers considered small businesses subject to RIMPE regime 1 RBU (US$460) 1 RBU (US$460) Non-registered taxpayers 1 RBU (US$460) 1 RBU (US$460)

A sales receipt is considered not delivered when:

  1. The taxpayer delivers a physical receipt with an expired authorization at the time of issuance.
  2. The taxpayer delivers an electronic receipt without being authorized for issuing it.
  3. Receipts belonging to another taxpayer are delivered.
  4. Unauthorized receipts are delivered.

The transmission of electronic receipts is considered verified when:

  1. The transmission to the SRI is made within the 72-hour period.
  2. The receipts have met all the validations established for successful transmission and reception in the SRI systems.
  3. The sales receipts include the information and values of the transaction carried out.

 

Andrea-Moya-abogados-ecuador

Andrea Moya, partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Refund of VAT Paid in Real Estate Projects

Regulation NAC-DGERCGC24-00000019 issued on May 28, 2024, the Internal Revenue Service (SRI) established the procedure for requesting the refund of VAT paid in real estate projects.

Below, we summarize the most important points:

  1. Who can request a refund?

Those companies and individuals who have paid VAT on local acquisitions or imports of goods and services for the construction of real estate projects.

  1.  What is the amount subject to refund?

The VAT generated, declared, and paid as of January 1, 2024, which does not generate the right to a tax credit, is subject to refund.

In the case of housing projects developed for sale to third parties, the refund amount may not exceed 6.5% of the total reference cost of the project registered with the Ministry of Urban Development and Housing (MIDUVI) or SRI.

In the case of housing projects executed by individuals for their use, the refund amount may not exceed 7% of the reference cost of the real estate project, that may not exceed US$105,340 (229 SBU) per dwelling.

  1.  What is the process to obtain the refund?

The beneficiary must:

  1. Perform a pre-validation of the request in the SRI’s web system.
  2. A request must be submitted per month and per project, to which the following must be attached:

i. Certificate of registration of the real estate project with MIDUVI or with SRI.
ii. Construction enabling title granted by the Municipal Government.
iii. Pre-validation report obtained in the SRI’s web system.
iv. List of the physical and electronic sales receipts supporting the total value of VAT paid in the local acquisition or import of goods and services, directly used in the real estate project.

 

Andrea-Moya-abogados-ecuador

Andre Moya, partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2024
DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Division of the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources

By Presidential Decree No. 256 dated on May 8, 2024, the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources (“ARCERNNR”) was ordered to be split into three new agencies:

  1. Mining Regulation and Control Agency (“ARCOM”).
  2. Electricity Regulation and Control Agency (“ARCONEL”).
  3. Hydrocarbons Regulation and Control Agency (“ARCH”).

ARCOM, ARCONEL, and ARCH will be attached to the Ministry of Energy and Mines and will regulate and control the mining, electricity, and hydrocarbon sectors, respectively.

The attributions, functions, programs, projects, and delegations established in laws, regulations, decrees, and other applicable regulations that corresponded to ARCERNNR will be assumed by ARCOM, ARCONEL, and ARCH, according to their respective sectors.

Each agency will have a board of directors consisting of: (i) the minister in charge of the sector or their permanent delegate, who will preside over it; (ii) a permanent delegate of the President of the Republic; and (iii) the national planning secretary or their permanent delegate (the “Board”).

The Board will appoint the executive director of each agency, who will exercise its legal, judicial, and extrajudicial representation.

The rights and obligations acquired by ARCERNNR will be transferred to the new agencies according to their respective sectors. In the case of contractual obligations, if it is not possible to identify the specific sector, they will be transferred to ARCONEL.

The split of ARCERNNR must be completed by August 8, 2024.

 

carlos-torres

Carlos Torres, senior associate at CorralRosales
ctorres@corralrosales.com
+593 2 2544144

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES

Customs Codes for applying 0% VAT rate and Excise Tax exemption on imports

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

Andrea Moya, partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

 

Fernanda Inga, senior associate at CorralRosales
finga@corralrosales.com
+593 2 2544144

DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

 

CORRALROSALES