Teleamazonas – Veto to Health Code Does Not Affect the Cannabis Industry



DATE: 30-09-2020


-Felipe Samaniego

MEDIA: Teleamazonas

The project of the Organic Health Code (COS) has been vetoed by the Executive affecting several sectors of Ecuador. One of those that has not been affected has been the cannabis sector; the news channel Teleamazonas interviewed our Partner and President of the Ecuadorian Association of Cannabis Industries Felipe Samaniego to provide his expert legal vision on this situation.

“This entire industry that is developing around cannabis and hemp definitely does not stop,” Samaniego said in this interview.

The Legal Secretary of Carondele Johana Pesántez argued the veto saying that the COS “contains an extensive development of technical issues in health matters that suffers from inaccuracies, erroneous definitions and an unclear health system structure in terms of competencies and responsibilities; it lacks a true update in terms of focus and content according to the requirements of society and the world “.

Last year, the National Assembly approved reforms to the COIP that allowed the production and distribution of products made from cannabis. This reform decriminalized the use of this plant for medicinal purposes, but the legal framework that allows its commercialization is still lacking.

With reference to this, Felipe Samaniego assures that there are two “authorities that must intervene. One for cultivation and the other for what is already the finished product. What the Ministry of Agriculture is doing is regulating what contains less than 1 % THC and the Ministry of Health must regulate what has 1% or more “, explains our Partner.

After the interview with Samaniego, the news published by Teleamazonas gathers the opinion of other experts who see in this veto an opportunity for the cannabis industry to continue growing. They also hope that this industry can advance with the production and generation of resources for Ecuador with the issuance of regulations with the respective legal framework.

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Bloomberg – Ecuador: Should You Register as a Nonresident Digital Service Provider?



DATE: 28-08-2020


-Andrea Moya

MEDIA: Bloomberg

Our partner specialized in Tax, Andrea Moya, published an article in Bloomberg where she explains that starting September 16, 2020, digital services will be subject to 12% VAT due to an amendment made to the Internal Tax Regime Law. Additionally, she analyses some of the matters to be considered by the nonresident digital service providers.

Our partner explains “If the entity registers in Ecuador as a nonresident digital service provider, the entity will be required to collect the VAT from the consumer and pay the VAT to the tax authority. If the entity does not register in Ecuador as a nonresident digital service provider, and the payment is made through an intermediary, for example through a credit or debit card, the credit card issuer will be required to withhold the VAT from the consumer and pay the VAT to the tax authority. If the payment is not made through an intermediary, the consumer will be required to liquidate and pay the VAT to the tax authority.”

Moya point out that, in the case of sharing economy business models, the VAT taxable base is equal to the commission charged by the platform, however, in general, the VAT taxable base is equal to the price of the service.

Our partner explains “The process for registering as a nonresident digital service provider and to file the VAT returns must be regulated by the tax authority. Therefore, one of the challenges of the authority when issuing the regulations will be to establish a simplified process that enables the nonresident provider to comply with its obligations, whether directly or through third-party service providers”.

If you want to read the complete article, click here