2024 brings tax changes in ISD, Rimpe and a new amnesty

2024 arrives in the tax area with several changes to take into account in the Simplified Regime for Entrepreneurs and Popular Companies (RIMPE) which comes back into force; foreign currency outflow tax (ISD) and amnesty of interest, penalties and surcharges for tax debts. This is based on the latest tax reform that President Daniel Noboa sent to the assembly and the executive order issued on December 29 this year on the ISD.

Payment of income tax, specified in resolution 36 of the SRI, is granted to persons whose taxable income is USD 11,902 per year. Those who have this type of income are people who normally earn around $2,080 a month, since the IESS contribution, possible deductions for personal expenses and even family obligations that they have must be deducted from the gross income.

On December 29, it was decided that the tax on foreign exchange outflows, which was expected to fall to 2%, would remain at 3.5% (the current percentage). The government decided this in order to prevent a further decline in tax collection. Although the decree of the former president Guillermo Lasso established that this tax, which was previously called a factor that discourages investment, will be gradually reduced; President Noboa’s decision was to keep him, at least until December 31, 2024.

In addition, the Law on Economic Efficiency, which is a tax reform adopted by the Parliament, introduces a withholding tax for large economic groups. The percentage will be defined by the ordinance, but the groups must deliver this money month after month, ensuring the liquidity of the spent fiscal treasury. In addition, he seeks to implement a new tax amnesty, amnesty of interest, penalties and surcharges for tax debts. Those who take advantage will have 150 working days to do so.

Meanwhile, Pablo Guevara, partner at Andersen Tax Consulting, explains that this year the reduction in income tax (PP) applies to natural persons who are responsible for persons with disabilities, catastrophic diseases, rare and/or orphans or for persons who are in charge or who in turn suffer from these conditions. According to the Law on Economic Efficiency and Employment, the amount of deduction for personal expenses will be equivalent to 18% of the lowest value between:

This same law repeals a provision incorporated in June 2023 that establishes that taxpayers classified as Rimpe will not be withheld at source when payments are made by credit card, debit card, charge or debit agreement, or other electronic means of payment.

Consequently, with the reform of the new law, taxpayers considered as Rimpe Emprendedores will be subject to a withholding tax rate of 1% at source; while Rimpe Negocios Populares taxpayers of 0% (Resolution NAC-DGERCGC14-787), regardless of the method of payment.

In addition, the payment of $60 for IR for fiscal year 2022 to Rimpe Negocios Populares taxpayers during the specified period is authorized, thereby resolving the debt of taxpayers who generated income less than the specified amount and who were, however, required to pay tax.

Forgiveness refers to the outstanding obligation (tax, interest and surcharge), without the need for the omitted taxpayer to request it. If the payment has been made, they will not be entitled to a refund. In addition, the income tax table for taxpayers classified as Rimpe Emprendedores (Article 23 LOEGA) is now in force. Those who are under this regime and have incomes of less than $20,000 will contribute their taxes according to the progressive table.