Large taxpayers are already taking measures to implement the new withholding tax system established by the Law on Economic Efficiency and Employment.

Several of the 500 largest companies in Ecuador (classified as large taxpayers) announced the changes to the law to their clients through public statements. For example, the telephone chain Supermaxi and Claro.

Supermaxi indicated that “as of January 1, 2024, in accordance with the Organic Law on Economic Efficiency and Job Creation, Corporación Favorita CA, being part of the large taxpayers, will no longer be subject to withholding tax at the source of income tax.rent . For this reason, withholding tax will no longer be received, except for state-owned companies.” They also clarify that the withholding of value added tax (VAT) has not changed.

Of course – with very similar text – he gave the same clarification to his clients. After consultation, another company that is a large taxpayer, such as ECSA (Ecuacorriente), has confirmed that it is in compliance with the applicable tax laws, so it will also apply the withholding tax.

The measure established by law seeks to improve the payment of taxes by large companies in conditions of insolvency in the country.

According to Pablo Guevara, a new self-taxation regime is incorporated in the Law on Economic Efficiency and Employment, by which large taxpayers (about 500 companies) with a large volume of sales will no longer be subject to withholding tax, but withholding tax will be income tax and pay it every month to the Tax Administration (SRI).

In the case of large taxpayers who have given these notices to their clients, Guevara explains, what they are asking is that their clients no longer suspend taxes from January 1.

For Guevara, the goal of the tax reform, in this matter, was for the state to receive these taxes faster and more securely. But in addition, the reform indicates that companies that were not subject to any kind of withholding tax – but paid tax at the end of the tax year – will now start paying. As an example, he cites export companies or companies that sell cars, and even companies that sell houses.

These days, the Minister of Economy, Juan Carlos Vega Malo, highlighted the support for large companies to have liquidity: “We had almost 200 million dollars in advance income tax from companies that did well and are willing to support the Government. . “We issued internal debt with the support of the financial system, including the cooperative system,” Vega said on January 3 at FM world.

While Guevara explained that self-taxation could not be applied yet, since since it is a monthly sale, the big tax payer will have to pay the deduction himself at the end of the month. At the same time, he reminded that the law did not determine the exact percentage of self-tax, so he hopes that by the end of the month there will be a corresponding regulation in which this percentage is determined. In the original proposal of the law sent by the Executive Power, 3% was included, but in the adopted law there was a possibility to determine this by a by-law.

The law established that it will be in different percentages and according to the production sector. This table will be determined by the Tax Administration (SRI) on the basis of the effective tax rate determined in the control processes according to your usual economic activity. It must not exceed 90% of the stated rate and will be considered a tax credit at the time of payment of income tax.

Likewise, Guevara explained that among the large taxpayers there are companies that are exempt from self-taxation. These include state or public companies, banana companies and other companies subject to a single tax.