The Law on Economic Efficiency and Employment was published on December 20, 2023 in the Official Register and thus entered into force.

This is the first law of Daniel Noboa’s government and it aims to generate investments and thus employment, especially for young people. The original project underwent several changes during the debate in the National Assembly, which approved it on Tuesday, December 19, with 107 votes.

149 pages of this law are in the first appendix no. 461. These are some of the topics of the new law:

Refund of paid VAT for real estate projects

Individuals and companies that pay VAT on the domestic procurement or import of goods and services for the construction of real estate projects are entitled to a refund without interest within a maximum of 90 days. Approval will be issued for this. Real estate projects must be registered by the competent ministry or competent entity, except for those that are intended for personal residence and do not exceed two projects per year.

Employment of young people

The proposed additional income tax relief for those who employ young people aged 18 to 29 will amount to 50% of salary costs, and it also includes the employment of alimony payers.

The deduction will be 75% if the new jobs are intended for young people of that age who graduated or graduated from public universities and higher technical, technological, pedagogical, artistic and higher conservatories or public, municipal or public educational institutions.

It will also be 75% for the taxpayer who achieves a net increase in jobs for the construction and agriculture sectors.

Tax forgiveness

The new law forgives the payment of $60 in income tax for the fiscal year 2022 to taxpayers who were considered in the Simplified regime for entrepreneurs and popular companies (Rimpe) during that period. Forgiveness will apply to outstanding payment obligations; those who have already paid will not be entitled to a refund.

Values ​​derived from the simplified tax regime (RISE) are also forgiven, as well as motor vehicle ownership taxes, environmental taxes, vehicle pollution taxes and 1% on the purchase and sale of used vehicles, administered by the Internal Revenue Service (SRI), on adjustments, reassessments, redeterminations or subsequent determinations conducted by the tax administration up to and including the fiscal period 2023.

Furthermore, due obligations corresponding to the tax of 1% on the sale and purchase of used vehicles administered by the Tax Administration and the fees administered by the National Agency for Transport and the Public Service for Traffic Accidents are forgiven, after confirming that the deadlines established in Article 55 of the Tax Code of the law have expired.

If subsequent procedures are carried out to determine liabilities for which taxpayers had access to this amnesty, payments made during the amnesty period must be applied directly to the capital, other payments must be considered as previous payments with established imputation rules. in the Tax Code.

Forgiveness of interest and penalties

1. Taxpayers will be able to obtain forgiveness of 75 percent of interest and penalties, without generating a surcharge, if they make the entire payment of the established obligations within seven days from the date of delivery of the act of determination.

2. Taxpayers who settle all due tax obligations on the date of entry into force of this law or those who were notified by the date of entry into force of this law by means of a notice of differences or a draft record, will enjoy a 100% remission of interest, fines and surcharges arising from taxes whose administration and billing corresponds to SRI.

The tax reform opens a wide umbrella of forgiveness of interest and penalties for debts not only with CSR

3. Decentralized autonomous governments, as well as their companies covered by the Organic Law on Public Enterprises, Agencies, Institutions, and Affiliated Entities, may agree to waive 100% of interest, penalties, and additional charges arising from taxes whose administration and collection is their responsibility, including the recording tax.

4. The National Transport Agency, the Public Traffic Accident Service and the prefectures will apply a 100% waiver of interest, penalties and surcharges on pending taxes under their administration and collected annually with motor vehicle ownership tax by the SRI- And. Owners of cargo equipment and heavy machinery used in civil engineering, mining and forestry can also access the exemption.

5. A waiver of 100% of interest and additional fees arising from expired education loan obligations or payment agreements, including interest for late payments, penalties and administrative costs until payment on the date of entry into force of the law, provided that they result from the implementation of educational credits awarded in accordance with public policies, plans, programs or projects to strengthen, train and train human talent, and were awarded by any public institution or the defunct Ecuadorian Institute for Educational Credits (IECE ), or managed by the also defunct Institute for the Promotion of Human Talent (IFTH), currently under the jurisdiction of the Secretariat for Higher Education, Science, Technology and Innovation (Senescyt), or those approved through banking with public funds.

Tax on sports forecasts

The uniform tax on the income of sports forecast operators will come into effect on July 1, 2024, and no later than January 1, as provided for in the Organic Decree on Strengthening the Family Economy. This is a 15% tax on income generated by sports betting operators via the Internet or any other means.

Domain dying

The decision or its registration will not extinguish the tax liability that could arise in relation to the property whose ownership ceases.