Read the untranslated law here: http://www.asambleanacional.gob.ec/es/system/files/ro_ley_organica_de_incentivos_a_la_produccion_y_prevencion_del_fraude_fiscal_ro_405_suplemento_del_29-12-2014.pdf
THE full considering: That, in paragraph 5 of article 3 of the Constitution of the Republic is established as fundamental duties of the State planning car national development and eradicate poverty, promote sustainable development and equitable redistribution of resources and wealth to gain access to the good life;
That paragraph 1 of article 284, in accordance with paragraph 7 of that article of the Constitution of the Republic, designated as the economic policy objectives ensure proper distribution of income and national wealth, as well as maintaining economic stability, understood as the highest level of production and employment sustainable over time;
That article 261 of the Constitution of the Republic of Ecuador establishes that the Central State will have exclusive competence over economic, tax policy and fi scal;
That, article 283 of the Constitution states that the economic system is social and solidarity; It recognizes the human being as subject and fi n; It tends to a dynamic and balanced relationship between society, State and market, in harmony with nature; and aims to ensure the production and reproduction of material and immaterial conditions enabling good living;
That article 300 of the Constitution of the Republic of Ecuador, lays down the principles of the tax system, giving priority to direct and progressive taxes. Tax policy will promote the redistribution and stimulate employment, the production of goods and services, and responsible environmental, social and economic behavior;
That, in accordance with the National Plan for good living, is a primary duty of the State to promote the equitable redistribution of resources and wealth, encourage investment and promote equal access to factors of production, fi nancial, technology and knowledge resources;
That the tax system is a fundamental instrument of economic policy, which in addition to providing resources to the State, allows to stimulate investment, savings, employment and the distribution of wealth; contribute to the economic stability; regular behaviors harmful to health and encourage activities that preserve the environment;
That article 306 of the Constitution of the Republic provides the State obligation to promote environmentally responsible exports, with preference for those 4 - supplement - registration offi cial No. 405 - Monday 29 December 2014 that generate higher employment and added value, and in particular exports of small and medium-sized producers;
That the principle of transparency of the tax system requires the effective exercise of the Faculty of management of taxes, through rules and instruments that lead to the prevention of evasion and tax avoidance, in the national and international level, discourages harmful practices of fi scal planning;
That article 301 of the Constitution of the Republic of Ecuador determines that only on the initiative of the Executive function and by law passed by the National Assembly, you can establish, modify, exonerate or extinguish tax. Only by legislative act of competent organ you can set, modify, exonerate and extinction rates and contributions and that the fees and special contributions are created and governed in accordance with the law; and, in exercise of the powers as you confi ere article 140 of the Constitution of the Republic, issued the following: law organic of incentives to production and prevention of fraud Prosecutor chapter I amendments to the tax code article 1.-practised in article 29 the following reforms: 1. replace "; and"partly the end of the second subparagraph of paragraph 1 by",".
2 replace the fi nal of the numeral 2 point by "; and, "."
3. Add following paragraph 2, a paragraph with the following text: "3. the taxpayer substitutes, understanding as such people that, when a tax law and otherwise, are placed instead of the taxpayer, being obliged to comply with the formal and material performance of tax obligations."
Article 2.-In article 152 replace paragraph 4 with the following: "4. indication of the security by the difference of the obligation, in the special case of the following article, regulated according to the resolution issued by the tax administration for the effect."
Article 3.-in the first subparagraph of article 153, replace the word "six" by "twenty-four" and in the second paragraph, replace the word "two" for "four".
Chapter II reforms to the law organic of regime tax internal article 4.-to article 4 then added the following: when their stay in the country " , including sporadic absences, is one hundred and eighty three (183) days calendar or more, consecutive or not, in the same period fi scal;
(b) when their stay in the country, including sporadic absences, is one hundred and eighty three (183) days calendar or more, consecutive or not, in a span of twelve months during two periods of time fi scales, unless that accredited residency fi scal for the corresponding period in another country or jurisdiction.
In case that accredits residency fi scal in a paradise fi scal or lower taxation jurisdiction, it must prove that it has remained in the country or jurisdiction at least one hundred and eighty-three (183) days calendar, consecutive or not, in the corresponding fiscal year. In case that a resident fi scal in Ecuador accredits later residence fi scal in a paradise fi scal or jurisdiction of lower taxation, this will keep the quality of resident fi scal in Ecuador through the four periods fi scales following the date they ceased to meet the conditions to be resident mentioned in previous literals , unless test that it has remained in the country or jurisdiction at least one hundred and eighty-three (183) days calendar, consecutive or not, in a fi scal year.
(c) the core of its activities or economic interests lies in Ecuador, directly or indirectly.
A natural person shall be the core of its activities or economic interests in the Ecuador, provided that you have obtained in the last twelve months, directly or indirectly, the value of income with respect to any other country, valued at average exchange of the period.
In the same way, it shall be deemed that a natural person has the core of its economic interests in the Ecuador when the value of its assets in Ecuador;
(d) not has been in any other country or jurisdiction over one hundred and eighty-three (183) days calendar, consecutive or not, in the fi scal year and closer family ties keep them in Ecuador.
Supplement - Registration offi cial No. 405 - Monday 29 December 2014 - 5 article 4.2.-residence fi scal societies.-a society has residence fi scal in Ecuador when it has been constituted or created in Ecuadorian territory, in accordance with national legislation.
"Article 4.3.-residence fi scal-under the terms of this title, shall interchangeably as residence fi scal to concepts of domicile and residence of the taxpayer."
Article 5-Article 8 be the following reforms: 1. Add the following text below the numeral 3: "3.1. The utilities that receive domiciled companies or not in Ecuador and Ecuadorian natural persons or foreign, resident or not in the country, coming from the transfer directly or indirectly of shares, participations, other representative of capital rights or other rights that allow the exploration, exploitation, concession or similar; companies domiciled or permanent establishments in Ecuador."
2. replace paragraph 10 by the following: '10. Any other income received no proof Ed societies and the national or foreign natural persons resident in Ecuador, including the equity increase."
Article 6.-in article 9 the following reforms carried out: 1. added to the fi nal of the first subparagraph of paragraph 1 as follows: "this exemption does not apply if the benefi ciary effective, under the terms defined in the regulations, is a natural person resident in Ecuador."
2 delete paragraph 14 text ", shares or participations".
3. replace the first subparagraph of paragraph 15 with the following: "15.-revenues obtained the fi deicomisos commercial, provided that does not develop business activities or operate business underway, as defi nition to this regard established in article 42.1 of the Act, or when any of the constituents or benefi ciaries are individuals or companies resident, established or located in a paradise fi scal or jurisdiction of lower taxation." Likewise, will be exempt income earned by investment funds and matching funds."
4. in the first subparagraph of paragraph 15.1. then the phrase "time fi deposits yields jo paid by domestic financial institutions to people
natural"deleted the phrase" and societies, except for institutions of the fi nancial system "; and, after the phrase "obtained by natural persons" removed the phrase "or societies".
5. in the second subparagraph of the paragraph 15.1. then the phrase "in the same way, the benefi ts or yields obtained by natural persons" removed the phrase "and company".
6 AI fi NISH of the last subparagraph of the paragraph 15.1. replace point fi nal with a comma and add the following: "even if depositors, constituents or benefi ciaries are natural persons resident or located in a paradise fi scal or jurisdiction of lower taxation."
7 Add following paragraph 20 the following numerals: "21. Non-reimbursable direct economic transfers which will deliver the State to individuals and societies within plans and agroforestry programmes, reforestation and the like created by the State.
22. the fi nancial originated in the Ecuadorian government debt yields."
Article 7.-Adding as follows from article 9(1) a new article that says: "article 9.2.-in the case of new and productive investment in certain economic sectors as basic industries in accordance with the law, the exemption from the payment of the tax income will be extended to ten (10) years from the first year in which attributable income generated directly and only to new investment. This term will be extended for two (2) years more in the event that such investments are made in the country border cantons."
Article 8.-In article 10 be the following reforms: 1.-Add at the beginning of the second subparagraph of paragraph 2 the phrase "Will be deductible costs or costs of contracts for commercial lease or leasing, according to the relevant accounting technique." and replace the phrase "dues or fees" for "costs or expenses", and the phrase "the purchase option price may not equal" "the purchase price is greater than or equal".
2. to fi nal of the numeral 7 Add the following paragraph: "when a taxpayer has proceeded to the revaluation of assets corresponding to such depreciation revaluation will not be deductible."
3. in paragraph 9 the following reforms carried out: a.-in the second subparagraph of paragraph 9 delete point fi nal, and add the following: ", and in accordance with the law."
6 supplement - registration offi cial No. 405 - Monday 29 December 2014 b.-incorporate a paragraph after the fifth, saying: "deductions corresponding to remuneration and social benefits that will contribute to the Ecuadorian Social Security Institute, for payments to elderly and migrant adults returned over 40 years will be deducted with 150% additional for a period of two years following the date of conclusion of the contract."
4 replace the third subparagraph of paragraph 11, and the conditions laid down herein, by the following: "Elimination defi nitive of the bad loans will be charged to this provision and to the results of the exercise in the part not covered by the provision, when the conditions laid down in the regulation have been met."
5 replace the phrase in paragraph 17: "during the period of 5 years, medium-sized companies," with the phrase: "during the period of 5 years, the micro, small and medium-sized enterprises".
6 replace number 2 of paragraph 18 with the following: "2) costs or expenses arising from contracts of leasing, according to the rules and accounting principles and generally accepted financial or commercial lease."
7 Add the following numerals to the fi nal of the article: "19. Costs and expenses for promotion and advertising in accordance with the exceptions, boundaries, segmentation and conditions laid down in the regulation.
Not may be deducted costs and expenses for promotion and advertising those taxpayers which marketed food prepared with hiperprocesado content. Criteria defi nition for this and other exceptions as specified in the regulation, be considered technical reports and the defi nitions of the health authority when appropriate."
20. the royalties, technical, administrative and consulting services paid by companies domiciled or not in Ecuador to their related parties will be deductible in accordance with the limits for each type or as a whole is established in the regulations for the implementation of this law."
Article 9.-then article 10 Add the following innumerado article: "article (...). -Tax deferred.-for tax purposes is allowed the recognition of assets and liabilities by deferred taxes, only in the cases and conditions established in the regulation.
In case of divergence between tax regulations and rules accounting and fi nancial, shall govern the first."
Article 10.-Replace the third subparagraph of article 11 with the following: "will not be accepted the deduction of losses by direct or indirect disposal of assets fi jos or currents, stocks, shares, other rights representing capital or other rights that allow the exploration, exploitation, concession or similar;" companies domiciled or permanent establishments in Ecuador, when the transaction takes place between related parties between society and the partner or spouse or relatives within the fourth degree of consanguinity or second of affi nity, or between the taxpayer and their spouse or relatives within the fourth degree of consanguinity or second of affi nity."
Article 11.-Replace article 12 by the following: 'article 12.-depreciation. -Will be deductible depreciation must register as assets, according to the accounting technique, its depreciation in more than one tax year, and values that are necessary for the fi nes of the business or activity in the terms defined in the regulations.
In the case of intangible assets which, in accordance with the accounting technique, must be amortized, such depreciation shall be carried out within the time limits laid down in the respective contract or within twenty (20) years; impairment of intangible assets with indefi nida lifespan will not be deductible.
In the tax period that ends the business or activity will be the relevant settings with the aim of amortize all of investment."
Article 12.-Article 13 be the following reforms: 1. replace paragraph 6 with the following: "(6.-Los pagos por primas de cesión o reaseguros, conforme las siguientes condiciones: a) 75% of premiums of assignment or reinsurance contracted with companies that do not have permanent establishment or representation in Ecuador, when they do not exceed the percentage designated by the insurance regulatory authority;" and, b) 50% of the premiums of assignment or reinsurance contracted with companies that do not have permanent establishment or representation in Ecuador, when they exceed the percentage designated by the insurance regulatory authority.
In all cases in which the insurance company abroad resident fi scal, constituted or located in havens fi scales or jurisdictions of lower taxation, by payment made be withheld at source on 100% of the premiums of assignment or reinsurance contracted."
Supplement - Registration offi cial No. 405 - Monday 29 December, 2014 - 2-7. Replace in paragraph 9 the phrase "fees or royalties" "costs or expenses".
Article 13.-fi nal article 19 added the following paragraph: "For tax purposes, associations, communes and cooperatives subject to the supervision of the Superintendency of the Popular solidarity, economy with the exception of the fi nancial popular and solidary system entities, may carry accounting records in accordance with rules simplifi ED to be established in the regulation."
Article 14.-then article 26 added the following innumerado article: "article (...) Way to determine the utility on the alienation of shares or other rights representing capital.-the utility on the alienation of shares or other rights representing capital is calculated thus: taxable income shall be the actual value of the alienation.
The deductible cost will be the nominal value, the purchase price, or the proportional shares or other rights representing capital equity value, as appropriate, in accordance with the technical fi nancial applicable for their evaluation.
Also will be deductible expenses directly related to the alienation."
Article 15.-Replace article 27 with the following: "article 27.-income only for the activities of the banana sector-tax revenues from the production, cultivation, export and local sale of bananas as provided for in this article, including other musaceae that occur in Ecuador, will be subject to a single income tax in accordance with the following provisions" : 1. local sale of bananas produced by the same taxpayer.
In this case the rate is up to 2% of the value of turnover of gross sales, which may not be calculated with prices below the minimum price of stall attached by the national authority of agriculture. The rate may be changed by Decree Executive, which may be established by segments and will take effect from the next period fi scal's publication, within the range of 1.25% to 2%. This rate may be reduced to 1% for the segment of popular and solidarity economy actors whose annual gross revenue amounts do not exceed the double of the amount of income established for the obligation to keep accounting and microproducers.
2. exportation of bananas that are not produced by the same taxable person.
In this case the rate is up to 2% of the value of the turnover of exports, which may not be calculated with prices below the minimum reference price of export attached by the national authority of agriculture. The rate may be changed by Decree Executive, which may be established by segments and will take effect from the next period fi scal's publication, within the range between 1.5% and 2%.
3 exportation of bananas produced by the same taxpayer.
In this case the tax shall be the sum of two components. The first component will consist of applying the same rate, established in paragraph 1 of this article, the result of multiplying the amount sold for the minimum price of stall attached by the national authority of agriculture. The second component will be apply the rate of up to 1.5% to the value of the turnover of exports, which may not be calculated with prices below the minimum reference price of export attached by the national authority of agriculture. By Executive Decree modify will be the rate of the second component and set it by segments and will take effect from the next period fi scal's publication, within the range between 1.25% and 1.5%.
4. exportation of bananas through associations of micro, small and medium-sized producers.
In this case the local sale of each producer Association will serve as provided in paragraph 1 of this article. Exports, on the other hand, will be subject to a fee of up to 1.25%. Exports may not be calculated with prices below the minimum reference price of export attached by the national authority of agriculture. The rate may be changed by Executive Decree, which may be established by segments and will take effect from the next period fi scal's publication, within the range of 0.5% to 1.25%.
Subject referred to in the preceding subparagraphs, exports to related parties may not be calculated with prices below a limit that is indexed annually with an indicator that refl axis variation of the international price by applying a fee fi ja 2%. Service internal revenue, by means of resolution specifi cally motivated and generally set the indexing methodology and appoint applied indicator and the value obtained shall be applicable to the following year. The initial value of this limit will be 45 cents on the dollar of the United States of America per kilogram of bananas of quality 22xu. This price for other qualities of bananas and other musaceae equivalencies will be technically established by the national authority of agriculture. This provision shall not apply in transactions with related parties established by presumption of proportion of 8 - supplement - registration offi cial No. 405 - Monday 29 December 2014 transactions, when the taxpayer demonstrates that relationship by having made transactions with resident companies fi scales, there is no established or located in havens fi scales or lower taxation jurisdictions, and that there is no relationship by address management, control or capital.
Tax laid down in this article shall be declared and paid in form, means and time limits established the regulations to this law. When a same taxpayer obtain income by more than one of the activities referred to in this article or get other income, you must calculate and declare their income tax for each type of taxable income.
Retention agents, be made to these taxpayers a deduction equivalent to the rates laid down in this article. For the settlement of this flat tax, this retention shall constitute tax credit.
Taxpayers who are dedicated exclusively to the activities referred to in this article shall be exempt from calculate and pay the income tax advance payment.
In those cases where taxpayers have additional activities the production, cultivation and exportation of bananas, for purposes of the calculation of the sum of the income tax, not considered assets, heritage, income, costs and expenses related to the designated activities, in accordance with the provisions in the regulations under this law.
Other sub-sectors of sector agricultural, fishing or fjordic, shall benefit from this regime for its production phase, when the President of the Republic, by Decree, so have it, provided that there is the report on the corresponding impact fi Scally of the Director or Director General of the internal revenue service. Fares will be fi xed by Executive Decree, within the range of between 1.5% and 2%."
Article 16.-Replace article 28 with the following: "article 28.-revenue from contracts for construction-taxpayers who obtain income by construction contracts paid tax based on the results that their accounting pursuant to the accounting standards."
When taxpayers are not forced to take accounting, or being forced, it does not conform to the accounting technical provisions, laws and regulations, without prejudice to the penalties to any place, be presumed that the tax base is equal to 15% of the total of the contract.
Fees natural persons, by coaching or management, received constitute income from professional services and, therefore, are not subject to the rules of this article."
Article 17.-Replace article 32 with the following: 'article 32.-sure, assignments and reinsurance contracted in foreign-tax corresponding to liquidate, in cases in which the relevant standard empowered to contract insurance with unauthorized foreign companies to operate in the country, will be withheld and paid by the insured, on a taxable equivalent basis to a quarter of the amount of the premium paid. If that designated foreign corporations are resident, are established or located in a paradise fi scal or jurisdiction of lower taxation, the withholdings at source shall be carried out on the total of the amount of the premium paid.
Tax corresponding to liquidate in cases of assignment or reinsurance contracted with companies that do not have permanent establishment or representation in Ecuador, will be withheld and paid by the transferor company, on a taxable equivalent basis at 25%, 50% or 100% of the amount of the premium paid, according to the paragraph 6 of article 13 of this law. Of this amount no value not may deduct is for expenses."
Article 18.-Performed the following reforms in the article 37: 1. Delete the first paragraph of article 37 and, instead, insert the following sub-paragraphs: "taxable income received by companies incorporated in Ecuador, as well as branches of foreign companies domiciled in the country and permanent establishments of foreign companies not domiciled apply 22% rate on its taxable base. However, the tax rate will be 25% when the company has shareholders, partners, partners, constituents, benefi ciaries or similar resident or established in havens fi scales or regimes of lower taxation with a participation, direct or indirect, individual or joint, equal to or greater than 50% of the share capital or of one that corresponds to the nature of the society. When the said stakeholding of paradises fi scales or regimes of lower taxation is less than 50%, 25% rate applies on the proportion of the taxable base corresponding to such participation, as indicated in the regulation.
Also apply the 25% tariff to all taxable society which fails to comply with the duty to report on the participation of its shareholders, partners, participants, constituents, benefi ciaries or similar, according to what established the regulations to this Act and the resolutions issued by the internal revenue service; without prejudice to other penalties that may be applicable."
2. change in the second paragraph of the second subparagraph of article 37 of the Act of internal tax regime, which continues: "in the case of the fi nancial popular and solidary sector organizations subject to the control of the Superintendence supplement - registration offi cial No. 405 - Monday 29 December 2014 - 9"
of Popular solidarity, economy which had opted for legal status and mutual savings and credit for housing associations, may also obtain such reduction, provided they earmarked the granting of loans to the productive sector of small and medium producers, under the conditions that the regulation establishes it, and carry out the corresponding capital increase. "The capital increase shall be perfected with the inscription in the respective register until December 31 of the tax year subsequent to the one that generated profits matter of reinvestment, and in the case of savings and credit cooperatives and similar shall be perfected in accordance with the relevant rules."
3. replace the penultimate subparagraph by the following: "when a company grants to its partners, shareholders, participate or benefi ciaries, loans of money, or any part thereof related non-commercial loans, this operation shall be considered as payment of advance dividends and, therefore, society must be the holding corresponding to the rate provided for companies on the transaction amount."
"Such retention shall be declared and paid the following month of carried out within the time limits provided for in the regulation and shall constitute society tax credit on your income tax return."
4 replace the last paragraph with the following: "For all purposes under the tax rules, when reference is made to the corporate income tax rate, understood to those mentioned in the first paragraph of this article as appropriate."
Article 19.-Replace article 39 with the following: ' article 39.-income from non residents-the taxable income of non-residents that they are not attributable to permanent establishments, provided that they do not have a percentage of retention specifi c established in tax laws, sent, paid or credited to account, directly, through compensation, or through the mediation of entities fi nancial or other intermediaries " they will pay the general tariff provided for societies on the taxable income. If the income referred to in this subsection are perceived by residents, constituted or located in havens fi scales or lower taxation jurisdictions, or are subject to fi scales preferential regimes, shall apply a retention at source equivalent to the maximum rate provided for natural persons.
Benefi ciaries of income profits or dividends that are sent, paid or credited to the outside, directly, through compensation or mediated entities fi nancial or other intermediaries, will pay general planned rate for corporate income tax, after the deduction of tax credits to those who have the right according to the preceding article.
Tax referred to in the preceding subparagraphs shall be retained in the source.
They will be subject to the payment of the general rate for corporations on taxable income, proceeds by a society or a natural person not resident in Ecuador, by direct or indirect alienation of shares, participations, other representative of capital rights or other rights that allow the exploration, exploitation, or similar; companies domiciled or permanent establishments in Ecuador.
For the purpose of this tax, the resident company or permanent establishment in Ecuador whose shares, participations and other rights mentioned in this article were disposed of directly or indirectly, will be substitute for the taxpayer and as such will be responsible for payment of the tax and its formal duties."
Article 20.-Add next article 39.1 the following innumerado article: "article (...) "Distribution of dividends or profits.-the percentage of retention of dividends or profits that applies to taxable income shall be established by the internal revenue service by General resolution unless it exceeds the difference between the maximum rate of customs duty income for individuals and the general rate of tax for companies."
Article 21.-Add next article 40A the following innumerado article: "article (...) Obligation to report and testify about the disposal of shares, participations and other representative rights.-service of internal revenue, by resolution of a general nature, shall establish the content, form and time limits for companies domiciled or permanent establishments in Ecuador whose shares, participations and other rights representing capital, or other rights that allow the exploration, exploitation, concession or similar which they were alienated, submit the information relating to such transactions.
The lack of presentation or presentation with errors of this information shall be punished by a fine of 5% of the real value of the transaction.
Responsible for this unique income tax must liquidate it and pay it in the form, terms and conditions established the regulations.
The natural person or society that disposes of shares, participations and other rights, as well as the purchaser of them, shall be obliged to inform the company domiciled in Ecuador of such transfers, about 10 - supplement - registration offi cial No. 405 - Monday, December 29, 2014 tax obligations that may have the company domiciled in the Ecuador as substitute. Not be informed the company domiciled in the Ecuador, you will have right to repeat against the purchaser, by the value of fines and taxes borne by the assignor would have to pay, as a substitute."
Article 22.-be in the paragraph 2 of article 41, the following reforms: 1.-in the last paragraph of the literal b) removed the phrase: "new investment".
2.-at the end of the literal b), add the following paragraph: "(Para efecto deel cálculo deel anticipo deel impuesto a la renta, los contribuyentes comprendidos en el literal b) of the paragraph 2 of this article, that by applying rules and accounting principles and generally accepted financial maintain revalued assets, not considered for this calculation, the value of the revaluation effected" the category of the asset for both the heritage.
Other effects may be excluded by application of the rules and accounting principles and fi nancial generally accepted in accordance with the rules."
(3 replaced the literal m) by the following: "m) for purposes of the calculation of the sum of the income tax, will miss out the headings corresponding to assets, costs and income and heritage tax deductible expenses, when applicable;" the amounts relating to incremental generation costs new employment or wage enhancement, as well as the acquisition of new assets destined to the improvement of productivity and technological innovation, and in general those new and productive investments and expenses effectively carried out, related benefi ts tax for payment of the tax to income that recognizes the production code for new investments ", in the terms established the regulations."
Article 23.-then the article 48 added the following innumerado article: "article (...) Whenever the benefi ciary effective resident fi scal in the Ecuador; "and society that distributes dividends or profit fails to comply with the duty to report on their corporate composition provided for in the regulation will be the retention of the income tax on such dividends and profits in accordance with the provisions of this law, without prejudice to the corresponding sanctions."
Article 24.-Added to the fi nal of article 55 the following paragraph: "17. Electric cookers for domestic use and which work exclusively through electric induction mechanisms, including those that have electric oven, as well as household cookers, designed for use in induction and electrical systems of heating of water for household use, including power showers."
Article 25.-Article 74 then added the following: "article (...). -VAT paid by older adults-older adults are entitled to a refund of the VAT paid on the acquisition of goods and services of first necessity of use or personal consumption.
The maximum monthly consumption tax base which applies the value returned will be up to five basic remuneration unifi ED of the worker, in force 1 January of the year in which the acquisition was made."
Article 26.-Add in the second paragraph of the number two of the second paragraph of article 76 the term "and former customs" then the text "price ex factory".
Article 27.-In article 76 carried the following reforms: 1. Add the following paragraph after the third: "Where the structure of the business of the taxable person includes the manufacture, distribution and sale of encumbered assets with this tax, for the calculation of the price ex factory, shall be excluded marginalized Enterprise utility."
2. replace the fourth subparagraph by the following:
"The former price customs consider the customs value of goods, rates, and funds raised by the national authority of customs and other items that are included in the price ex factory."
3. remove the last paragraph.
Article 28.-In article 82 carried out the following reforms: 1. inside the box fi nal in the table corresponding to group I of article 82, after: "Incandescent bulbs except those used as inputs automotive", add the following text: "." "Kitchens, kitchenettes, water heaters and water heating systems, use household, which is functioning fully or partially through the combustion of gas."
2. replace rate product specifi cigarettes of Group V of article 82 by the following: "0,1310 USD per unit".
Article 29.-Merge article 116 with the following text: "article 116.-empowering the internal revenue service so that, by legislative act, establish rates supplement - registration offi cial No. 405 - Monday 29 December 2014 - 11 necessary for the functioning of mechanisms of identifi cation, marking and tracing of products, as contemplated in compliance as provided in article 87 of this law."
Chapter III reforms to the code organic of the production, trade and investment article 30.-in article 24, paragraph 2 before the point end add a text that says: ", the exemption provided for basic industries and the deduction of additional 100% of the cost or expense of annual depreciation, in accordance with the law".
Article 31.-Add next to the first paragraph of article 25 the following subparagraph: "Can be established in the investment contracts, contractual commitments that are necessary for the development of the new investment, which will be previously approved by the governing body of matter where the investment to develop."
Article 32.-Add next article 26 the next chapter: "chapter (...). -Incentive of tax stability contracts of investment art.... Field of application-societies that investments for the exploitation of metal mining medium and large scale, according to the conditions that are established in this chapter, shall be entitled to benefi ciar tax stability, for a certain time, from the signing of an investment agreement.
The tax stability may also be granted at the request of a party to the contract of investment of the companies of other sectors, including basic industries, to carry out productive investment for the development of the country, provided that: 1. the amount of the investment is more than $ 100 million;
2. technical report made by the Ministry with powers in the field of investment, over the economic benefits that will bring this investment for the country;
3. report of the Attorney General of the State, and 4. Authorization of the President of the Republic for the signing of a contract in which will be regulated requirements, amounts and time limits for investment as well as the commitments made by the investor.
Administrators and operators of ZEDES can not access this benefit.
Article (...) The applicable rates of income tax for companies that sign investment contracts that grant any them tax stability, are the following: to) for societies that investments for the exploitation of large and medium scale metal mining and basic industries to adopt this incentive, will be 22%.
(b) for the companies of other sectors carrying out investments that contribute to the change of the country's productive grid, the rate will be 25%.
Article (...) Scope of tax stability.-the tax stability, will be limited: to) for income tax purposes, stability will be extended on all the rules for determining the tax base and the amount of tribute to pay, in force on the date of signing of the investment contract. Not applicable on rules relating to the powers, procedures, methods and formal duties that the tax administration, use and set for control and the exercise of its powers.
(b) the tax stability can be extended to tax out of currency and other national direct tax, exclusively with respect to the rates and each tax exemptions, applicable on the date of signing of the investment contract.
(c) in the case of companies which make investments for the exploitation of metal mining medium and large-scale, whose production is intended for export, you can also obtain tax stability of tax value-added, exclusively on their rates and exemptions.
Article (...) Force.-the term of the tax stability will be maximum, the term of the investment contract signed, in accordance with the provisions of this code.
Article (...) The incentive loss.-when the technical secretariat of the sectoral Council of production have knowledge of non-compliance with the requirements, amounts and time limits to make the investment, or the commitments made by the investor in relation to the investment contract, produced without a cause proof every apparent, notify face this fact to the taxpayer and be granted 15 days to bring forward the proof corresponding cations. In case of not to misrepresent these facts, the Secretariat notify face the loss of the right to tax stability provided for in this chapter.
"Once signed a contract of investment granting the right to benefi ciar tax stability, the investor may not waive the benefi t, which only may be terminated for the reasons provided for legally."
12 - Supplement - registration offi cial No. 405 - Monday 29 December 2014 article 33.-added in the third paragraph of clause (c)) of article 36, then the phrase "these limits do not apply to products obtained in" the following: "economic sectors identified as basic industries and".
Article 34.-Replace in article 43 point fi nal with a comma, and then add the following sentence: "except where the administrator is a company of mixed economy or public."
Article 35.-Added next to title I of book V, before the article 96, the following text: "Chapter I".
Article 36.-Article 102, then add the next chapter: "chapter II the development and promotion of basic industries article (...). Notwithstanding the incentives for productive development and promotion of export established in this code, the State will promote basic industries that take advantage of the raw materials from renewable and non-renewable natural resources, transforming them into products that are then required by other industries for the manufacture of intermediate products and end. For the fi nes of this code, shall be understood as basic industries in the following sectors: a. casting and refi nation of copper or aluminium;
b. Steel Foundry for the production of flat steel;
c. Refi nation of hydrocarbons;
d. petrochemical industry;
e pulp industry; and, f. construction and repair of naval vessels. "
Chapter IV reforms to the law reform for the equity tax of the ECUADOR article 37.-in article 159, carried out the following reforms: 1. fi nal third paragraph add the following: "may benefi ciar are the specific exemption in this subsection, exclusively those loans to the segments that are established for the purpose, and meet deadlines ", conditions and other requirements determined by the tax policy Committee."
2. in the sixth paragraph replaced the phrase "at least one year in the country" by "in the country, minimum period stipulated by the Committee on tax policy, which may not be less than one year".
3. replace the seventh subparagraph by the following: "are also exempt payments made abroad, coming from yields fi nancial, capital gains and capital of those investments made abroad, in value securities issued by legal entities domiciled in Ecuador, who have entered the country and remained a minimum period stipulated by the tax policy Committee that it may not be less than one year, earmarked for the funding of housing, microcredit or the investments planned in the production code. This exemption does not apply when the payment is made directly or indirectly to individuals or companies resident or domiciled in Ecuador, in havens fi scales or preferential schemes or between related parties.
May benefi ciar is certain derogations in the two preceding subparagraphs, exclusively those investments that are in areas that are established for the purpose, and complying with the deadlines, conditions and other requirements determined by the tax policy Committee."
4 Add the fi nal of article 159 the following subsection:
"Are exempt from the payment of the ISD imports to consumption of electric cookers and induction, parts and pieces; pots designed for use on induction cookers; as well as electric heating of domestic water systems, including power showers."
Article 38.-In article 160 replaced the phrase "of the accreditation or deposit or the amount of the cheque, transfer or turn to the outside." by the phrase "accreditation, deposit, cheque, transfer, turn and in general any other mechanism of extinction of obligations when these operations are carried out to the outside."
Article 39.-Added the following literal to the fi nal of article 180: "j) the properties that are used in production of banana or other sectors or subsectors that the arrangements of the single income tax in accordance with article 27 of the law of internal tax regime."
Article 40.-Replace the paragraph 2 of article 183 by the following: "2. the holding of investments abroad."
Chapter V reforms to the law for the reform of the finance public article 41.-be in the seventh General provision, the following reforms: Supplement - registry offi cial No. 405 - Monday 29 December 2014 - 13 1-in literal d) do the following reforms: to) in the numeral ii) delete "and" b) in the numeral iii) delete "."and put";" and,"c) add the following number:"iv) transport, store or maintain products, with or without fi nes commercial, which do not have components of security established in the tax regulations."
(2 in the literal e) added after the phrase "of the assets seized provisionally", the phrase "or if not shown that standards requiring the placement of product safety components, as appropriate met".
Chapter VI tax credit article 42.-law reforms the fourth paragraph be removed in article 7.
Chapter VII reforms to the law of mining article 43.-delete in article 30, the phrase: "previous payment of a right to registration which corresponds to one per cent of the value of the transaction."
Article 44.-The innumerado article following article 127 carried out following modifi cations: 1. to fi nal of the first clause removed the following sentence "and pay the right of registration corresponding to one percent (1%) of the value of the transaction.", and instead added a point fi nal.
2. in the second paragraph removed the phrase "and to the payment of the right".
Article 45.-Repeal the seventh General provision, incorporated by law reform to the Mining Act, the reform law for tax equity in the Ecuador and the organic law of tax, posted in the registry offi cial supplement on July 16, 2013 37.
Article 46.-Repeal the fourth transitional provision, incorporated by law reform to the Mining Act, the reform law for tax equity in the Ecuador and the organic law of tax, posted in the registry offi cial supplement on July 16, 2013 37.
Chapter VIII reforms to the law of the old article 47.-replace subsection first article 14 with the following: "any person greater than sixty-five years of age and with monthly income estimated at a maximum of five basic remuneration unifi ED or that it has a heritage that does not exceed five hundred unifi ed basic remuneration, will be exempt from the payment of taxes fi scales and municipal." Tax administered by the internal revenue service it shall apply the provisions of the law."
Chapter IX reforms to the law organic of disabilities article 48.-Article 78 be replaced by the following: "article 78.-imposed value added.-persons with disabilities have the right to that the added tax paid on the acquisition of goods and services of first necessity of use or personal consumption, les is reinstated through the issuance of cheque" , wire transfer or other means of payment, without interest, in no longer than ninety (90) days of your request in accordance with the respective regulations.
If the above term not claimed, value-added tax had reimbursed the respective legal interests will be recognized.
An annual maximum amount is set to return tax paid value added of up to twelve percent (12%) of the equivalent taxable basic fraction with zero rate of the income tax payment three times; however, the value returned by each monthly period may not exceed to the twelfth of the annual maximum amount previously designated.
VAT paid in local procurement, for personal and exclusive use of any of the goods set out in the numbers from 1 to 8 of article 74 of this law will have no limit on the amount of your refund.
The benefi t laid down in this article, which may not extend to more than one benefi ciary, also will be applicable to the substitutes."
Chapter X reforms the law forest and of conservation of AREAS natural life wildlife article 49.-to article 56 then added the following: "article (...). -Economic incentive for afforestation and reforestation with commercial purposes.-establish the economic incentive for afforestation and reforestation with commercial purposes, which is a direct economic transfer of non-refundable character that gives the Ecuadorian State through the governing Ministry of agricultural policy, to natural and legal persons, 14 - supplement - registration offi cial No. 405 - Monday 29 December 2014 communes associations and cooperatives, productive, and organizations that make up the popular solidarity, economy to disburse or reimburse, in accordance with the regulations issued for the purpose, a part of the costs that invest for the establishment and maintenance of the forest plantation.
Under no circumstances the forest incentive will be delivered when they are in: to) fragile ecosystems;
b) Protected Areas;
(c) permanent protection areas; and, (d) Areas that receive another type of incentive.
The governing Ministry of agricultural policy, shall issue regulations to determine the requirements, procedures and conditions relating to the granting and administration of incentive, selection of benefi ciaries, among others established."
Chapter XI amendments to the Act of tourism article 50.-in the tourism law, replace article 39 with the following: "(Art. 39.-El ministerio rector de la política turística determinará y regulará a través de Acuerdo Ministerial los siguientes recursos: a) rates and contributions that are believed to boost tourism;"
(b) the contribution of one per thousand on the value of assets fi xed which must annually pay all providers of services to the tourism establishments, as he is available in the regulations to this Act;
(c) the granting of registration of tourism values; (y, d) the fee for the issuance of each ticket to travel from Ecuador to anywhere overseas. "
Article 51.-the tourism law, deleted articles 40 and 41.
PROVISION GENERAL disposition GENERAL first: Those taxpayers who do not pay producers at least the minimum support price attached by the national authority of agriculture, or rules any discount or refund request not proof specified on the invoice value, are excluded from the regime established in article 27 of the law of tax for the period in which the breach occurred.
TRANSITIONAL provision transitional first-up to the issuance of the respective Executive Decree designated in article 27 of the law on tax, apply the following rates: to) local sale of bananas produced by the same taxable person in boxes per week.
Number of boxes per week rate from 1 to 500 1% 501 to 1,000 1.25% from 1001 to 3000 1.5% of 3.001 thereafter 2% b) rate for the exportation of bananas that are not produced by the same taxable person will be 1.75%.
((c) rate of the second component exports of bananas produced by the same taxable person in boxes per week: number of boxes per week up to 50,000 1.25% rate of 50.001 up 1.5% d) for exports of associations of micro and small producers, whose members produce individually up to 1,000 cases a week, the rate will be 0.5%. In other cases of exports by associations of micro, small and medium-sized producers, the rate will be 1%.
In the event that the taxpayer is part of a financial group, for the application of these rates shall be deemed all of boxes sold or produced by the economic group.
SECOND transitional provision: Companies incorporated before the entry into force of the organic code of production, trade and investments that make the acquisition of assets fi xed new and productive, have the right to the deduction of the cent per cent (100%) additional cost or annual depreciation expense that generate such investments for five (5) years counted since there is the beginning of their productive use.
To apply this benefi t: a. investment product which purchased assets fi xed, new and productive, must take place within one of the priority sectors for the State, defined by the code of the production, trade and investment.
Supplement - Registration offi cial No. 405 - Monday 29 December 2014 - 15 b. The mere change of ownership of productive assets, which are already in operation or operation, does not imply new investment.
c. the benefi t provided for in this provision shall apply when the active fi jos, new and productive, have been acquired for entitlement to other benefits provided for in the tax law, such as the reduction of the tariff by reinvestment of profits or additional deductions for costs or depreciation expenses.
Provisions of this transitional provision shall also apply to companies incorporated as of December 30, 2010 within urban jurisdictions in Quito and Guayaquil.
The term of this transitional provision will be ten (10) years from the year following its publication in the registry offi cial."
TRANSITIONAL provision three.-the duration of the program of incentives for afforestation and reforestation with commercial purposes shall be thirty (30) years from the entry into force of the present reform with the purpose of encouraging at least the establishment of thirty thousand (30,000) annual hectares.
AVAILABLE to TRANSIENT fourth: settle the trust fund joint tourism promotion, made on July 29, 2002, before the notary thirty second of the Canton of Quito, administered by the Trustees of the Pacific co S.A. Fidupacifi co. The assets that make up this autonomous patrimony and affixed to the accountability end issued by the trust, will be transferred to the National Treasury single account as well as the resources that are in the account of the Central Bank of Ecuador for this Fund.
TRANSITIONAL provision fifth.-the associations, communes and cooperatives, except the sector entities fi nancial popular and solidary, complying with the requirements laid down in the regulations for the implementation of this law, shall have a system of formal and material duties simplifi Ed, which will be established in the concerned regulation within a maximum period of six months.
PROVISION end.-the provisions of this law shall become effective from the day following its publication in the registry offi cial.
Given and signed in the Metropolitan District of Quito, at twenty-two days of the month of December 2014.
f.) GABRIELA RIVADENEIRA BURBANO, President.
f.) Dr. Libya RIVAS ORDÓÑEZ, Secretary General.
GUAYAQUIL, TO VEINTITRES OF DECEMBER IN THE YEAR ONE TWO THOUSAND AND FOURTEEN.
SUBJECT TO SANCTIONS AND PROMULGUESE.
f.) RAFAEL CORREA DELGADO, constitutional President of the Republic.
The copy of the original.-Lo Certifi is co-Guayaquil, on December 23, 2014.
f.) Dr. Alexis Mera Giler, Secretary GENERAL law of the Presidency of the Republic.
16 supplement - registration offi cial No. 405 - Monday, December 29, 2014
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