Tag Archives: Tax benefits

CorralRosales > Tax benefits

Declaration and payment of self-withholdings applicable to Large Taxpayers

Posted on

Through Resolution NAC-DGERCGC24-00000030, the Internal Revenue Service regulated the declaration and payment of income tax self-withholdings applicable to large taxpayers:

  1. Self-Withholdings Declaration: Self-withholdings must be declared monthly using the “Minimum Advance Payment of Income Tax and Self-Withholdings of Large Taxpayers Form”. This form will be used from August to declare the amounts payable for the month of July.
  2. Outflow Tax (ISD) Credit Notes: Outflow Tax credit notes may be used to fully or partially offset the amount payable for self-withholdings applicable to large taxpayers settled monthly, within the validity period of such notes.
  3. Exception Credit Notes: Exception credit notes may be used to fully or partially offset the amount payable for self-withholdings applicable to large taxpayers settled monthly, within the validity period of such notes.

 

Andrea 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

Donation of equipment to the Police for applying tax benefits

Posted on

Through Official Letter DADM-MP-01, the Ministry of Home Affairs issued the “Donation Process Manual”, which regulates the process to donate equipment and supplies to the National Police and access the 150% additional deduction for the calculation of income tax.

Article 10 of the Internal Tax Regime Law provides an additional deduction of 150% on the taxable base of income tax for donations of equipment and supplies to the National Police, aimed at protecting public order.

According to the Manual, the donor must meet the following general requirements:

  1. Not be subject to legal prohibitions for contracting with the Government.
  2. Have an “active” status in the Single Taxpayer Registry.
  3. Be the owner, possessor, manufacturer, or buyer of the equipment and supplies to be donated.

The donation request must include the following documents:

  1. Declaration of the legality of funds in the format provided in the Manual.
  2. Letter of intent to donate, which should include the general data of the donor and the technical specifications of the equipment or supplies to be donated.

In the case of weapons, ammunition, explosives, and accessories, the corresponding permits must be attached, and the import documentation if applicable.

In the case of used equipment and supplies (tangible or intangible), a report must be attached that establishes the state of the used good, its conditions, and useful life.

 

Andrea 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

Renewal – Tax benefits to new investments

Posted on
Through Executive Decree 1130 issued on August 19, 2020, the President of the Republic resolved to extend the term for applying the tax benefits for new investments established in the Law for Productive Development, Attraction of Investments and Employment Generation for an additional 24 months, that is, until August 21, 2022.
Therefore, new investments made until August 21, 2022 will be eligible for the following benefits:
  1. New investments made in prioritized sectors will be exempt from paying income tax according to the following:
    • Investments made in the urban areas of Quito and Guayaquil will be entitled to an income tax exemption for 8 years.
    • Investments made outside the urban areas of Quito and Guayaquil will be entitled to an income tax exemption for 12 years.
    • Productive investments in industrial, agro-industrial, and agro-associative sectors, made in border jurisdictions will be entitled to an income tax exemption for 15 years.

In the case of existing companies, the exemption will be applied proportionally according to the following alternatives:

  • If the company is able to divide its assets, liabilities, income, costs, expenses, profits, and labor participation attributable to the new investment, the exemption may be applied by cost center.
  • The company is able to apply the benefit proportionally according to the following formula:

tax-benefits-new-investments-lawyers-ecuador

The reduction in the income tax rate may not be greater than 10 percentage points, unless the Strategic Committee for the Promotion and Attraction of Investments (CEPAI) authorizes a higheer reduction.

  1. Companies that make productive investments in any sector of the economy, and that enter into an investment contract with the Government, will be exempted from paying Foreign Exchange Tax (ISD) over the following payments:
    • Import of capital goods and raw materials necessary for the development of the project, up to the amounts and terms established in the investment contract.
    • Dividends distributed individuals with tax residence in Ecuador as long as the resources come from abroad and the investor demonstrates the entry of such resources in the country.

Do you want to receive our newsletters with information like the one you just read?
Click here and subscribe.

DISCLAIMER: The preceding text has been prepared for general information purposes only. 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 given situation requires the specific opinion and view of the firm in Quito / Guayaquil, Ecuador.

CORRALROSALES