Ecuador introduced the Organic Law for Financial Relief and Economic Strengthening of Generations on 9 December 2024, which took effect on the same date.
This legislation includes several key measures which includes an income tax credit for companies for expanding their workforce.
Under this law, companies can claim an income tax credit from October 2024 to December 2024 based on a percentage of their social security contributions, depending on their size and gross receipts. For instance, large companies can receive 5% to 15%, medium companies 20% to 30%, and small or micro companies 35% to 45%. Medium banks can receive tax credits for 5% to 10%, small banks 15% to 20%, and other financial institutions, excluding large banks, 25%.
Taxpayers with outstanding balances as of 31 October 2024 can apply for a 12-month payment plan with interest adjustments by 7 February 2024. A full waiver of interest, fines, and surcharges on overdue taxes applies if the principal amount is settled within the deadline.
