Tag Archives: Quito

By Resolution NAC-DGERCGC24-00000035, issued on October 30, 2024, the Internal Revenue Service amended the rules regarding the transmission of electronic sales receipts and the issuance of pre-printed receipts.

Previously, taxpayers were required to transmit electronic receipts to the tax administration within a maximum of 72 hours after generation. Under the new amendment, taxpayers may now submit receipts within a period of 4 business days from the date of issuance.

Additionally, as long as the emergency in the electrical sector persists, taxpayers are permitted to issue pre-printed receipts up to a limit of 5% of the total receipts issued in the previous fiscal year. This limit was previously set at 1%.

 

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

 

The “Law to Promote Private Initiative in Energy Generation” (the “Law”) was published on October 28, 2024, in Official Gazette Supplement No. 673. The Law aims to encourage private investment in renewable energy generation to help overcome the country’s energy crisis.

Below is a summary of the Law:

1. Transitional generation is defined as “…non-renewable generation technologies with low environmental impact, which allow for a gradual transition of the energy matrix.”

1. Concession contracts may be backed by guarantees to be defined in the regulations of the Law.

1. The collection and payment for regulated demand transactions shall be carried out according to the priority order set by the Energy Regulation and Control Agency (“ARCONEL”). Distributors may establish a trust to ensure compliance with this priority order.

1. Installed assets for self-supply, self-generation, cogeneration, and unconventional renewable energy generation up to 10 MW will not revert to the State.

1. For priority projects listed in the Master Electricity Plan (“PME”), the Ministry of Energy and Mines (“MEM”) will conduct public selection processes.

1. If a renewable or transitional energy project is identified by the private sector, is not included in the PME, and has a capacity of less than 100 MW, it may be developed by the proponent with prior authorization from the MEM. For larger capacities, delegation through a public selection process will be required.

1. Priority and preferential pricing will be given to private projects up to 100 MW that promote the use of clean technologies and unconventional renewable energy with storage capacity and interconnection networks.

1. Only unconventional renewable energy projects up to 10 MW will be granted priority dispatch and preferential pricing.

1. The MEM must include legal stability clauses in all contracts with public or private entities, considering the central and local taxes in effect at the time of contract signing.

1. Private projects with a 10 MW limit, either in the permitting phase or in operation, may request permit reviews or power adjustments, respectively, to comply with the new limits of the Bill.

1. The holder of the concession contract resulting from a PPS may utilize mechanisms to guarantee payment to their financiers or creditors, who may enter into direct agreements with the granting entity to ensure the continuity of the project. Step-in rights in favor of financiers and creditors will be established in the Law’s regulations.

1. Thermoelectric generators must present transition plans to clean technologies, including natural gas use, and develop hybrid projects combining thermal and renewable energy. The State will facilitate the granting of licenses for natural gas imports.

1. Legal entities established in the country may import natural gas for self-consumption in productive processes or to generate electricity.

1. Public and private banks may offer financial products or loans with preferential rates to individuals and legal entities seeking to implement self-supply energy generation systems (“Self-Supply Systems”) using renewable sources.

1. Beneficiaries of Self-Supply Systems may sell any surplus energy generated.

1. Decentralized Autonomous Governments must implement waste management systems, including waste processing for energy generation to be sold to the National Interconnected System.

1. By December 13, 2024, ARCONEL and MEM must issue the necessary regulations for implementing the Law.

1. By November 27, 2024, the Hydrocarbon Regulation and Control Agency and MEM must issue regulations for the importation of natural gas for generation or self-generation projects.

1. By November 27, 2024, distributors must sign regulated contracts with the concessionaires of PME projects with the respective concession contracts.

1. By January 28, 2025, MEM must call for tenders for the exploitation and repowering of identified natural gas fields.

 

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2567676

Mario Fernández, Associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

 

On October 25, 2024, the President of the Republic issued Executive Decree 438, whereby the following was established:

1. To suspend the working day for the public and private sector on October 31, 2024.

1. That the public sector will recover its working day through an additional hour during the subsequent working days.

1. That the private sector may recover its working day in the same way as the public sector.

1. On October 31, 2024, the entities and agencies of the public sector shall guarantee the provision of public services.

In our opinion, the private sector, by mutual agreement between the employer and the employee, may determine how to execute the working day or how to compensate it.

 

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

On October 25, 2024, the Data Protection Authority (“SPDP”) issued Resolution No. SPDP-SPDP-2024-0013-R, enacting the Regulation on the Submission and Processing of Complaints and Requests for Data Protection (“Regulation”).

The main points are below:

1. Purpose and Scope of the Regulation

The Regulation governs the submission and processing of complaints and requests before the SPDP following the principles of expeditiousness, lawfulness, timeliness, transparency, good faith, objectivity, effectiveness, efficiency, and quality.

This Regulation applies when:

• The exercise of the data subjects’ rights has been violated.
• Data protection principles have been breached.
• The data controller or processor has failed to comply with obligations set forth in the data protection regulatory framework.

1. Complaints and Requests

• Complaint: A mechanism by which an individual or an entity notifies the SPDP of an alleged violation of data protection regulations, such as the improper use of personal data, security breaches, or unlawful practices.
• Request: A petition filed by a data subject to address a specific issue related to processing their personal data, such as a lack of response or improper data handling. The objective is to request that the controller or processor correct their actions, recommend corrective measures, or initiate an administrative sanction procedure.

1. Submission of Complaints and Requests

Complaints and requests may be submitted physically at the SPDP offices or electronically through the channels made available.

1. Complaint Procedure

Once a complaint is submitted, the SPDP may initiate preliminary actions or impose provisional protective measures to safeguard the data subject’s rights. These measures may include:

• Withdrawal of products, documents, or other goods.
• Access limitations or restrictions.
• Removal of individuals.
• Suspension of the processing activity.
• Closure of establishments.

During the preliminary proceedings, the SPDP will:

• Identify the alleged perpetrator(s).
• Establish the specific circumstances of the case.
• Determine relevant contributing factors.
• Assess whether sufficient grounds exist to initiate an administrative procedure.

If necessary, the SPDP may order further investigations, inquiries, audits, or inspections to clarify the facts. The administrative act initiating the preliminary action will be notified to the investigated party in accordance with the Administrative Code (“COA”).

Once the preliminary actions are completed the SPDP will issue an initial report which will be notified to the investigated party. The party will have ten working days from the date of notification to submit its response.

If no response is provided within the given term, the preliminary report will have full legal effect and become the final report, concluding the initial actions.

The SPDP has a maximum of six months from the issuance of the administrative act to decide whether to initiate an administrative sanctioning procedure.

1. Request Procedure

Requests submitted by data subjects must meet the requirements established in the Regulation. If the request is incomplete or unclear, the SPDP will order the petitioner to amend or clarify it within five days of notification. Failure to do so will result in the request being archived.

The SPDP will assess whether the request falls within its jurisdiction and, if necessary, may open a thirty-day evidentiary period during which the data subject and controller may submit additional evidence.

Within twenty days following the conclusion of the evidentiary period, the SPDP will issue a report that may contain:

1. A recommendation on whether or not to initiate an administrative sanction procedure.
2. A recommendation regarding the corrective measures to be implemented.

Corrective measures and administrative sanction procedures will be governed by the provisions of the COA, Data Protection Law, the Regulations to the Data Protection Law, and any other applicable regulations issued by the SPDP.

The Regulation came into effect on October 25, 2024.

 

Rafael Serrano, Partner at CorralRosales
rserrano@corralrosales.com
+593 2 2544144

On October 22, 2024, the Ministry of Labor issued the Ministerial Agreement No. MDT-2024-200, hereinafter the “Agreement”. We highlight the following:

• The Agreement could be applied by employers of the private sector that require a temporary modification of the working day due to the national electric emergency.

• The modification of the working day must be implemented by means of a written mutual agreement between the employer and the employees and must be registered in the SUT system within 30 days after the signing of the agreement.

• The modification of working hours should adjust to the following:
  1. Employees shall be entitled to a rest of 72 continuous hours.
  2. Employees could agree to a working day from 7:00 a.m. to 5:00 p.m. on Mondays, Tuesdays, Wednesdays and Thursdays or a working day from 7:00 a.m. to 5:00 p.m. on Thursdays, Fridays, Saturdays, and Sundays.
  3. Shifts that exceed 40 hours per week shall be paid as overtime.

• The modification of the working hours can be terminated either by agreement of the parties or automatically by the end of the energy crisis.

• The system will be enabled for the registration of the working day modifications within 10 days from the date of the Ministerial Agreement.

 

Edmundo Ramos, Partner at CorralRosales
eramos@corralrosales.com
+593 2 2544144

 

María Victoria Beltrán, Senior Associate at CorralRosales
mbeltran@corralrosales.com
+593 2 2544144

 

The Ministry of Production, Foreign Trade, Investment, and Fisheries has published the Free Trade Zone Investor Kit, which contains the instructions for requesting approval for Free Trade Zone projects and Operator´s qualifications.

Below is a list of the documents that must be submitted in both physical and digital formats:

1. Application form for Free Trade Zone declaration and Operator User qualification, which must include the following documents:

1. 1. Certificates of compliance issued by the Internal Revenue Service, the Ecuadorian Social Security Institute, and the Superintendence of Banks or the Superintendence of Companies, Securities, and Insurance, as applicable.
   2. Documents required for approval as an Operator of a Free Zone Trade:
   1. 1. By-laws of the company which must indicate that its corporate purpose is the execution of Free Trade Zone activities;
      2. Taxpayer Registration Certificate (RUC);
      3. Appointment Document and ID card of the legal representative.
      4. Notarized Sworn statement declaring that the applicant has not previously been an operator or administrator of a free trade zone whose authorization has been revoked due to a sanctioning procedure. and,
      5. Documents that display the financial capacity of the applicant.

       

1. Master Development Plan Report form, which must include:

1. 1. Technical report on the project location, execution timeline, land plans, project layout and design, identification of sustainable development goals (SDG), environmental study or license, and details of potential users and support services.
   2. Economic report that covers social, economic, and productive indicators, generation of economies of scale, socioeconomic aspects, job creation details, financial projections, economic and financial evaluation, and project’s financial structure and capacity.
   3. Market report regarding expected participation in local and international markets, market strategy, and its relation to potential users, business model, potential competition, and a preliminary list of imports.

1. Annex form to the Master Plan, which must include:

1. 1. Operator´s investment schedule;
   2. SDG compliance schedule; and,
   3. Employment generation schedule.

    

1. Request index referencing the location of each document.

The forms and instructions are available at the following URL.

Fernanda Inga, Senior Associate at CorralRosales
finga@corralrosales.com
+593 2 2544144

Resolution No. SENAE-SENAE-2024-0083-RE issued by the Customs Authority (SENAE) on July 31, 2024, amended the regulations for the import of goods under the exception regime for household goods and work equipment.

The most important points include:

1. Eligible goods

The list of new or used household articles that are eligible for import under the household effects regime was updated:

 

Household goods Eligible quantity Bedroom set One per household member plus an additional set. Dining set One per household. Living groom set and its accessories One per household member plus an additional backyard furniture set. Kitchen Stove  

 

 

 

 

One per household. The quantity may increase depending on the goods.

 

 

 

 

 

 

  Refrigerator / freezer / wine cooler Microwave Oven or similar Dishwasher Range hood Kitchen Cabinet Grill or similar Water dispenser Water purifying filters Washing machine Clothes dryer Projector Home theater system Speaker or audio system Electric doorbell (intercom)  

 

One per household. The quantity may increase depending on the goods. Baby monitor intercom Home surveillance system Lawn mower or weed trimmer Vacuum cleaner Floor polisher for home usage Garbage disposal unit Audio or video recorder  

 

 

 

 

 

One per household. Video player Video game console Gym machines Bicycle Video recorder Camera Television Landline phone Desktop computer Computer peripheral Printer Fireplace, outdoor heater or heater Air conditioner unit Alcoholic beverages Up to 50 liters in total and 2 liters for each commercial brand. Clothing, footwear, and accessories Up to 200 kilograms for each household member. Vehicle (only for Ecuadorian returning migrants) Its value can’t exceed 80 times the minimum wage (US$36,800) Motorbike (only for Ecuadorian returning migrants) Its value can’t exceed 25 times the minimum wage (US$11,500).

Goods not included in the list will be eligible as long as they are used for personal purposes and not for commercial purposes.

1. Study trip

Ecuadorian citizens who have left the country for educational purposes can only import one motorcycle into the country. These types of migrants are not allowed to import vehicles unless they have resided abroad after ending their studies.

1. Articles restricted under work equipment regime.

The following items are added to the list of articles that are restricted to be imported as work equipment: raw materials, supplies, textiles, footwear, weapons, explosives, flares, fireworks, and any other items subject to Armed Forces regulations.

1. Late arrival

If a household member arrives in the country 6 months after the date of acceptance of the customs import declaration, the customs authority will determine the difference to be paid for foreign trade taxes.

1. Penalties

If the imported goods are not properly identified or do not match with the data registered in the list of goods subject to the exception regime, the returning migrant or foreigner will be subject to the payment of a fine of 50% of the minimum wage (US$ 230,00 for fiscal year 2024), according to the article 193 of the Customs Regulation Law.

The full text is available on the following link:

https://www.aduana.gob.ec/gacnorm/data/2024/08/01/11/SENAE-SENAE-2024-0083-RE.pdf

© CORRALROSALES 2024

NOTE: The above text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused by actions taken or not taken based on the information contained in this document. Any specific situation requires the specific opinion and advice of the firm.

CORRALROSALES