The National Assembly of Ecuador approved the law containing provisional tax measures to help resolve the crisis caused by the natural disaster of 16 April 2016. Generally, the Law establishes that contributions introduced are non-deductible for income tax purposes and 3% penalty of the undue payment is imposed upon late or non-payment of the amounts due as established by the Law.
Contribution based on equity
Non-resident companies are subject to a contribution at a rate of 0.90% based on the value of their immovable property held in Ecuador, and on the nominal value of the shares held in Ecuadorian companies. Non-resident companies that are resident in a tax haven or low-tax jurisdiction are subject to the contribution at a rate of 1.8%. Equity contributions will be payable in three monthly installments as from the date of publication of the Law in the Official Gazette. Foreign companies without an Ecuadorian tax ID number have until the 28th of each month to pay the contribution.
Contribution based on profits
Companies that are income tax payers are subject to a contribution based on profits at 3% of taxable income for 2015. The contribution based on profits is also payable by trusts or fiduciaries, even if these are not income taxpayers. The contribution based on profits will be payable in three monthly installments as from the date of publication of the Law in the Official Gazette.
