Self-Withholding – Large Taxpayers

On January 12, 2024, the Internal Revenue Service issued Resolution NAC-DGERCGC24-00000003 which regulates the income tax self-withholding regime applicable for large taxpayers.

For calculating the self-withholding amount, all taxable income must be considered except:

1.    Revenue subject to special income tax regimes,

2.    Revenue subject to another self-withholding regime established by law, and

3.    Revenue derived from the following sources:

a.    Contracts for the provision of services for the exploration and exploitation of hydrocarbons if the payment is made by the Ecuadorian Government,
b.    Contracts with the central government and its entities,
c.    Contracts with local governments and its entities; and
d.    Contracts with Government social security entities.

If the taxable income cannot be segregated from exempt income, the self-withholding must be calculated over the total income received monthly.

Large Taxpayers must issue a withholding certificate monthly. The self-withholding percentage applicable to each taxpayer can be reviewed at the following link:
LINK

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