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