Persons and companies engaged in sports forecasting must pay a single income tax of 15% if the Organic Law for Strengthening the Family Economy is approved, which the Executive Power submitted to the National Assembly this Thursday, May 11.

This emergency law has as a fundamental change the reduction of the payment of income tax for natural persons, but it also includes changes that those who belong to the Simplified Regime for Entrepreneurs and Popular Activities (Rimpe) pay tax on real turnover. On the other hand, it creates a new tax for sports forecast operators.

The government announces an immediate reduction in income tax

This single income tax is assessed on income generated by operators of sports predictions live, online or by any other means.

If a bet is placed with an operator who is not a resident of Ecuador, the player must take a 15% tax on the value of his bet at the time of placing, explains the Tax Administration (SRI).

Income tax: now the reduction will depend on how many family obligations the taxpayer has, not on salary

The tax base for resident taxpayers will be the total realized income (including commissions), minus the total rewards paid in the same period, provided that at the time of the reward payment, a deduction was made in the percentages determined for the Performance.

For non-residents, the tax base will be the total amount paid by the user in each transaction.

Registration and payment of taxes: taxpayers who are tax residents in the country must submit a monthly tax return for the previous period. The tax is paid within the deadlines and in the manner determined by the decision.

When the business subject to this tax is carried out with non-resident entities or without a permanent business unit, the following procedure will be followed:

The executive authority indicates that companies and natural persons have been identified in Ecuador associated with sports prediction activities that operate through digital platforms in the country; In this way, more than a dozen platforms were also identified that advertise at sports events without representation in the territory of Ecuador and with which there are transactions in Ecuador. Therefore, “it is necessary to create a new tax that allows the collection, in accordance with tax principles, of those generated by these sports forecast operators, in order to reveal the true taxable capacity.”