The Internal Revenue Service (SRI) issued in 2024 Resolution No. NAC-DGERCGC24-00000033, establishing the conditions for the filing of the Beneficial Owners Report and Corporate Composition (REBEFICS, by its acronym in Spanish). This new report replaces the previous Shareholders and Partners Annex (Annex APS) and introduces important changes in the information to be reported, particularly regarding the identification of beneficial owners.
- Parties required to file the REBEFICS
The REBEFICS report must be filed by the following taxpayers:
- The companies described in article 98 of the Internal Tax Regime Law.
- Branches of foreign companies.
- Permanent establishments of non-resident foreign companies.
- Trusts or similar structures incorporated abroad when the trustee, the administrator, the constituent or the beneficiaries are tax residents in Ecuador.
- Structure of the REBEFICS
The report is divided into two segments:
a. First Segment: Corporate Composition
In this segment, the structure of the company must be reported up to the last level of the corporate composition in which individuals who are beneficial owners and/or tax residents in Ecuador are identified.
However, there are certain exceptions:
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- The non-tax resident company must be reported as the last level when the individual at the end of the chain are not tax residents in Ecuador and hold less than 10% of the share capital of the local entity.
- When in the corporate structure there are companies, whose shares are listed on the stock exchange, only the owners of shares that are not traded or reserved for a limited group of investors shall be reported.
b. Second Segment: Beneficial Owners
This new segment seeks to identify the individuals who have effective control of the companies. The beneficial owner will be identified as the individual who meets the following criteria:
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- Individuals with direct or indirect participation: Those who own, acting alone or jointly, 10% or more of the capital, voting rights, dividends, earnings or profits of the company.
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- Individuals with control or decision-making capacity: Those who have the necessary powers to appoint or remove the majority of the directors, influence financial, operational or commercial agreements, or exercise any other type of control over the company.
- Individuals with managerial functions: If no beneficial owners is identified according to the above criteria, the persons in charge of making strategic decisions in the company will be considered as such.
- Information to be reported:
With respect to the beneficial owners, the following must be reported:
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- Name and surname.
- Type and number of identification.
- Date of birth.
- Place of nationality and tax domicile.
- Complete address.
- Criteria to be considered an beneficial owner.
- Participation percentage.
Additionally, the ultima beneficial owners must submit a letter with this information to the local reporting company.
- Filing Deadlines
The report must be filed annually during the month of February, according to the ninth digit of the Taxpayer Identification Number (RUC) of the company. In addition, if there are changes in the corporate composition or in the information of final beneficiaries, an update must be filed until the 28th of the month following such change.
- Consequences of non-compliance
If a company fails to file the REBEFICS report or does so with incorrect information, it will be subject to a 28% income tax rate instead of 25%; and dividends distributed to its shareholders will be subject to a withholding tax of 14.8% instead of 10%.
- Report before the Superintendence of Companies, Securities and Insurance
The beneficial owners report to be filed before the Superintendence of Companies, Securities and Insurance has not been modified. Therefore, there is no threshold, and a complete list of all shareholders must be reported, indicating their names, surnames and marital status, if they are individuals, or the corporate name, if they are legal entities and, in all cases, their nationalities and domiciles. If the list of partners or shareholders includes other legal entities, they must also provide the list of their members, and so on until the corresponding individual is determined or identified.
In the case of direct or indirect shareholders that are companies listed on a stock exchange, a certificate attesting such fact, issued by the competent authority of the country of origin, duly notarized and apostilled, may be submitted.
Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144