The income tax is applied to income earned those natural persons, undivided estates and national or foreign companies. The tax year consists of 1o. January to 31 December.
To calculate the tax payable by a taxpayer on all the taxable income returns, discounts, costs, expenses and deductions attributable to such income shall be reduced. In this result we call tax base.
The taxable amount of income from work as employees consists of the taxable income less the value of personal contributions to the Ecuadorian Social Security Institute (IESS), except when they are paid by the employer.
The declaration of income tax is mandatory for all natural persons, undivided estates and corporations, even when all their incomes are formed of exempt income, except for:
Taxpayers domiciled abroad, who have no representative in the country and only have income subject to withholding at source.
Natural persons whose gross income during the tax year do not it exceed the untaxed basic fraction.
Is worth mentioning that are obliged to maintain accounting records all societies and individuals and undivided successions operating its own capital to start their business or 1o. January of each tax year have passed basic 9-relieved fractions of income tax or with annual gross revenues of these activities, the preceding fiscal year, amounted to more than 15 basic fractions-relieved or whose annual costs and expenses attributable to the business, the preceding fiscal year amounted to more than 12 basic-relieved fractions.
Natural persons engaged in business activities and operating capital or obtain a lower than expected revenues in the preceding paragraph, as well as professional, commission, artisans, agents, representatives and other self-employed must have an account of income and expenses to determine your taxable income.
The deadlines for submission of the declaration, vary according to the ninth digit of the ID or RUC, according to the type of taxpayer:
|Ninth Digit||Natural People||Societies|
|1||March 10||April 10|
|2||March 12||April 12|
|3||March 14||April 14|
|4||March 16||April 16|
|5||March 18||April 18|
|6||March 20||April 20|
|7||March 22||April 22|
|8||March 24||April 24|
|9||March 26||April 26|
|0||March 28||April 28|
Tax on foreign exchange outflow (ISD)
The operative event for the tax is the transfer, delivery or transfer of currencies that are made abroad, whether in cash or through check writing, transfers, withdrawals or payments of any nature, including international offsets, whether that operation perform or not the intervention of the institutions of the financial system.
Tax rate foreign exchange outflow, also known as ISD, is 5%.
Who should pay?
The ISD must be paid by all natural persons, undivided successions, and private, domestic and foreign companies., In accordance with the existing law.
Financial Institutions (IFIs) and the Central Bank constitute withholding agents when transferring funds abroad for disposal of third parties.
Courier companies that send foreign currency abroad by order of its customers, constitute agents of perception.
Entities and state agencies, state enterprises, international organizations, their duly accredited foreign officials in the country, diplomatic missions, consular offices and foreign officials of these entities are not subject to payment of ISD transfers, shipments or transfers engaged abroad. To avoid being subject to retention, transfers abroad made by the subjects mentioned in this paragraph must be accompanied by the form “Declaration of transaction exempt / tax not subject to the outflow of currency,” which will be filled only through Internet.
Upon what do I pay?
The Tax on foreign exchange outflow taxes the value of all the operations and monetary transactions made abroad, with or without the intervention of the institutions of the financial system.
ISD also cause payments from abroad for principal amortization, interest and fees generated outside taxed with tax credit, as well as those related to payment of imports of goods, services and intangibles, even when payments are made by transfers but financial resources outside the taxpayer or third parties.
In the case of imports of goods partially or totally canceled from the outside, the tax on foreign exchange outflows will be declared and paid on the paid portion from the outside, the day of the nationalization of such goods; importers must pay the tax through form 106, stating the code “4580” in the “Tax Code”.
Furthermore, it is assumed foreign exchange outflows have taken place, being caused applicable tax, in the case of exports of goods and services produced in Ecuador, when corresponding to the payments for those exports do not enter the currency in Ecuador within 180 calendar days made.
In this case, the tax paid in the currencies not entered, you can deduct the value of the Tax on foreign exchange outflow (ISD) generated in payments from abroad, referred to in the preceding paragraph.
ISD payment defined in this paragraph is carried out annually in the form, terms and other requirements by general resolution to establish the Internal Revenue Service.
Value Aggregate Tax (IVA)
The Value Aggregate Tax (IVA) is levied on the value of the transfer of ownership or importation of goods of bodily nature, at all stages of marketing, as well as copyright, industrial property and related rights; and the value of the services provided. There are basically two rates for this tax rate they are 12% and 0%.
It is also understood as a transfer to the sale of movable body nature, that they have been received on consignment and leasing with option to purchase and sale these, including leasing, in all its forms; well as the use personal consumption or of personal property.
The tax base of this tax is the total value of the movable property body nature that are transferred or services provided, calculated on the basis of their selling prices or service provision, that they include taxes, service fees and else legal expenses attributable to price. Price thus established may deduct only the values for discounts and bonuses, the value of the goods and packaging returned by the buyer and interest and insurance premiums installment sales.
The tax base for imports is the result of adding the value CIF taxes, duties, taxes, fees, surcharges and other expenses on the import declaration and other relevant documents.
In the cases barter, retirement of goods for personal use or consumption and donations, the taxable amount is the value of goods, which is determined by reference to market prices.
This tax is declared on a monthly basis if the goods are transferred or services rendered are taxed at 12% rate; semiannually and only when goods are transferred or taxed at zero rate or untaxed services are provided, as well as those that are subject to full VAT withholding caused, unless VAT withholding agent (whose statement will be monthly).
Special Consumptions Tax
The Special Consumptions Tax ICE applies to goods and services, domestic or imported origin, detailed in Article 82 of the Internal Tax Regime Law.
They are taxed at ICE the following goods and services: goods and services subject to ICE.