Ecuador

Corporate - Tax administration

Last reviewed - 10 February 2020

Taxable period

The fiscal year is the calendar year.

Tax returns

The tax system operates on the basis of self-assessment, with subsequent inspection by the tax authorities.

Tax filing deadlines begin on 10 April and continue up to 28 April. The tax return due dates are determined by the ninth digit of the company’s Tax Identification Number (TIN).

Payment of tax

Local tax authorities have established that for CIT purposes, and its pre-payments, companies are obligated to follow IFRS accounting principles.

In general terms, most companies are required to keep accounting records are allowed to make voluntary CIT prepayments based on the following calculation: 50% of the previous year CIT due less Income Tax Withholding (WHT) applied in such fiscal year.

The final CIT payment is due between 10 April and 28 April.

Tax audit process

In general terms, tax authorities look at the consistency of the information delivered by the taxpayers and information reported by third parties. Tax authorities can issue communications in order to require explanations on any detected inconsistency. Additionally, accounting inspections can be performed.

Statute of limitations

Fiscal authorities have three years from the date of filing to start proceedings for tax audits or assessment and collection of taxes.

The statute of limitations is extended from three to six years if the corresponding tax returns have not been filed or are incompletely filed. A tax audit can be reopened, verified, or amended within one year from the date of completion.

Topics of focus for tax authorities

Tax authorities usually focus on substance, formal compliance requirements, and consistency of information filed.