The deadlines for submitting the supplement on personal expenses to the Tax Administration (SRI) are running. This is the basis for the cost projection that was presented last year and now with the invoices, the amounts must be confirmed and thus approach the income tax reduction corresponding to the year 2022 and which must be reported in March.

Accounts matter here. “They should always request receipts when purchasing to be able to take advantage of this discount benefit,” explains Carolina Galarza in the instructions distributed by the SRI so that taxpayers can comply with the presentation of their annex.

Which documents serve as support?

Invoices or sales slips must be in the name of the taxpayer or spouse or common-law partner, children and even parents as long as they are dependent on the taxpayer and do not generate income.

Like invoices, sales slips must be approved by SRI, be numbered and contain the supplier’s information, such as name, address, RUC. Bills of sale are issued by taxpayers who are considered popular companies and are under the Rimpe regime.

What costs apply to the discount?

Place of residence:

Education, art and culture:

Feed:

Equip:

Health:

Tourism costs:

This is the first time that the annex and the tax return are made with the new rules defined in the tax reform that was approved at the end of 2021. SRI maintains a guide on how to present the annex on its social networks. It is on YouTube at the following link: https://www.youtube.com/watch?v=uSjetrmCG6w&t=1409s.

All workers who presented their cost projection in January 2022 to reduce the payment of income tax must now present an allowance for personal expenses. This February 10, the deadlines for complying with this procedure began to expire, if you do it late you will pay a penalty of $30, and if you do not do it, the reduction will be canceled and you will have to pay more income tax.

The income tax cycle has three parts: the first was in January 2022 when personal expenses were presented, calculating how much will be spent during that year. Now we are in the second part: in February 2023 the annex of those costs must be presented, in March it is time for the declaration, all this corresponds to the financial year 2022. The projection of costs that was recently presented (last January) Until 2023 should be supported next year .

“If you don’t substantiate your personal expenses, it will happen that your declaration in which you reduced the tax with the explanation that you had expenses, if you don’t justify those expenses later, what the tax administration does is not consider those expenses for tax refund and therefore the what should automatically happen is that you have to pay income tax again, which will certainly be higher,” explained the Director of the Tax Administration (SRI), Francisco Briones.