Regulation NAC-DGERCGC21-00000040 issued by the General Director of the Internal Revenue Service and published in the Second Supplement of the Official Registry 550 of October 1, 2021, establishes the requirements to apply the 0% rate of Outflow Tax (ISD) on transfers of money abroad made by foreign airlines.
In order to apply the 0% rate, airlines must be designated by the authority of their country to develop in Ecuador activities of international transportation of passengers, cargo, a combination of them or cargo only.
Prior to the transfer of money, the beneficiaries must submit to the financial institution or courier company the following:
- The “Informative Declaration Form of Transactions Exempted or Not Subject to Outflow Tax “, using for this purpose box 819.
- The documents that certify its quality of beneficiary, this is the designation by the authority of its country to develop in Ecuador activities of international transport.
Withholding certificates should not be issued for transfers of money abroad that are subject to 0% Outflow Tax rate.
If beneficiaries have made transfers of money abroad from October 1, 2021, and have been subject to 5% Outflow Tax, this tax must be reimbursed by the financial institutions or courier companies that made the withholding.
Specialist in Tax matter
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