Agreement between the USA and Ecuador on the exchange of information in tax matters, it is already the law of the Republic. That, almost two years after the signing, is in the past On March 3, it was published in Narodne novine 261 saying international instrumentissued by the Ministry of Foreign Affairs and Human Mobility.

The agreement states that both countries will assist each other through the exchange of information that may be relevant to the administration and application of their domestic tax-related laws. The exchange will be in accordance with the rules of confidentiality.

The document also indicates that in the case of the USA, the information will be on all federal taxes and in the case of Ecuador about taxes administered by the Tax Administration (SRI).

There is also three ways of exchange. The first automatic through which both countries submit, without the need for a request, information they consider useful and this is done periodically. It can also be delivered from spontaneous way and this means that any of the countries can consider the relevant information and deliver it on time. In addition, it is also believed that it could be request for information from another country and even allow the authorities of another country to meet with taxpayers in their territory. They can also allow the presence of tax inspections and authorities of the other party.

In accordance with Napoleón Santamaría, President of the Corporation for Fiscal Transparency of Ecuador (CTFE), After the publication in the Official Gazette of this agreement, which was already signed in February 2021, this document is now the Law of the Republic. An exchange of information on tax matters can now take place. For Santamaría, SRI must now start applying exchange contracts both automatically and on demand. For Santamaría, it would be best if the auto-topic were strengthened to work because the Global Forum tool works with at least 140 countries that send information, without having to request it.

With the law already in force, the government will be able to have information about the money, goods and assets that Ecuadorians have in that country. If these are declared, there is no problem, but if they are not, then controls and sanctions will come.

Santamaría reminded that this agreement with the US had to complete several steps, from the signing in April 2021: it had to be reviewed by the Constitutional Court, then it went through the Assembly and the Presidency, he said.

In the meantime, Xavier Sisa, lawyer for business consulting, The fact that the Agreement between the governments of the US and Ecuador on the exchange of information on tax matters has already been published allows the flow of information of tax residents of Ecuador who have accounts in the US and vice versa. For Sis, one of the requirements or immediate execution would be the exchange of information for people who have not regularized their capital as allowed by the Law on Economic Development adopted in November 2021. Thanks to that law, there was a grace period for those who wanted to report these capitals that were not regulated. But that period ended on December 31, 2022.

With this information, the Tax Administration will be able to carry out subsequent controls in a better way, he commented.

Indeed, with the Economic Development Act of November 2021 About $1.874 million of assets are regulated, representing an additional charge of $92 million. And that thanks to the participation of 642 taxpayers who took advantage of the temporary regime. The SRI mentioned that they managed to identify about 5000 million dollars of assets abroad, of which the aforementioned almost 2000 dollars have already been regulated. This year, SRI will try to confirm the state of the balance sheet (another 3 billion dollars of assets that are known to be abroad). A good part of them would be in the USA.