Tax obligations: What happens if you don’t report family obligations as part of personal expenses?

Next Saturday Deadlines will begin on February 10 for delivery, electronic, from annex of personal expenses corresponding to fiscal year 2023according to the regular tax calendar of the Tax Administration (SRI).

On that day, this tax obligation must be fulfilled by dependent workers who have provided the employer with a projection of personal expenses for the previous year. In that attachment (uploaded online via SRI website) predicted values ​​will be broken down, which will not necessarily match every item on the submitted form, but may vary in each type of expense (food, housing, health, etc.), but in the end the total amount should match what is provided in July last year to avoid paying the missing tax amount.

However, there are a few cases where if the total value of the expenses in the allowance does not match the projection, this does not mean that the missing tax must be paid.

Example: A no-load employee whose income reaches $1,300 per month ($15,600 annually, excluding tithes and reserve funds that do not charge income tax) projects his or her allowable expenses of $5,352.97 (7 baskets of basic family members as of January 2023, from $764.71 each), which will reduce your tax liability by $963.53.

If we do the calculation to check the tax paid by this employee (with $15,600 of taxable income per year), applying the appropriate formulas and deductions (personal contribution to the IESS), it gives us that his tax liability is $120.19, which is the value much greater than the $963.53 reduction to represent the $5,352.97 cost cap. Therefore, it was not necessary to project the $5,352.97 cap, but simply by justifying the $667.72 in expenses, that worker received a reduction of $120.19 which covered $120.19 of your tax incurred.

In that case, the employee will not necessarily have to make an annex for $5,352.97, but only for $667.72. Of course, it will be mandatory to make a new income tax return (on the form for natural persons) in March of this year, since you will have to match the actual values ​​of personal expenses (which are automatically transferred to the tax form). income after sending the expense report ) to confirm that your tax liability is zero dollars and that your actual items are what appears on the attachment.

Why record expenses in the personal expense allowance?

For those without family obligations, their spending limit for 2023 was $5,352.97 and they will only have to prepare and send an annex for that year based on the received electronic bills that appear in the SRI repository accessed through an identification number and code assigned by the tax administration or subsequently changed by the same taxpayer. If you still have any physical account approved by SRI, you can enter it manually in the same form.

But, What happens to those who put one, two, three or more family obligations in their projection? It must be mandatory register your loads first and then start developing your own online annex. So You will be able to check whether the SRI has confirmed it or confirmed it as a burdena family member who was initially included in the projection submitted last July to his employer, and who will now (and only at that moment) be able to confirm as a limitation what he put in the projection, or even if for some reason less burdensome, he can include some additional fees when registering in the SRI database, which in turn will be linked online with the civil registry database, with the IESS database and with the database of the financial system of Ecuador in order to first verify the employee’s relationship with the person from whom enrollment is requested, and then determine whether does that family member have any type of income or social security affiliation that prevents him from being included in this register.

It may happen that you get a message in a red box, on the SRI page, indicating that a certain person “It cannot be brought in as a family burden.”

There are at least five reasons why a family member cannot be claimed as a burden on this income tax credit benefit for any taxpayer.

1. Po have contributions as a member To the Ecuadorian Social Security Institute (IESS), even if they are voluntary contributions, and not necessarily in relation to the dependency of the taxpayer’s father, mother, spouse or children.

2. Because of this family burden receives monthly, quarterly, semi-annually or annually financial performancewhose data the national financial system submits to SRI online, whether it is your father, mother, spouse or children.

3. Because that family burden (in this case children) have passed the age of 21 at the beginning of the fiscal year to be declared (2023).

4. Because it’s knownin this case father or mother, He did not get the SRI key and is therefore not a registered user of the tax administration portal. The father or mother that the taxpayer includes as a burden must have their SRI code in this way (and only in this way). confirm online that your child requests to be included in family responsibilities.

5. Even in the last case, there may be a situation where The civil registry does not find any relationship of kinship with the taxpayer and therefore does not accept it as a burden. If this happens, the employee should immediately go to the SRI to give them instructions on how to proceed and whether any information in the register needs to be updated to make this record valid.

Remember that time it takes them longer to register their family obligations in the SRI online supplement, if any new developments occur, they will not be able to submit the personal expense supplement on time, which will generate an initial penalty of $30, which does not exempt them from meeting that annual tax liability.

If it happens that the employee has included (for example) four levies in his projection, and when creating the annex, CSR does not validate any of them, or even all of them, when sending the annex and recalculating his tax in the form of income (natural person) ) you have to pay the tax you’re missing (next March) that your employer couldn’t deduct, because you notified them of a series of charges that were supposed to be valid but ended up not being.

If someone has included in their cost projection (for example) three fees, they must identify them online in their annex, through the SRI website, in order to avoid a tax offense or criminal offense, since they would be using a tax reduction that would not suit you .

The fact that in July of last year you submitted copies of your spouse’s and children’s identity card or the father’s or mother’s consent to be registered as a burden to the employer does not mean that the DSI was informed about it. burden (these documents are only used for the temporary application of tax relief to the employee), since the only way to enter and validate them before the SEC is with the username and personal password of each employee.

Schedule for sending annexes of personal expenses

The deadlines start from February 10 based on the ninth digit of JMBG or RUC, in case the taxpayer does not work in a dependent relationship.

The deadline for a new ninth digit expires every two days, ending on February 28 with a zero. However, this calendar changes every year. “When the expiry date falls on a weekend or national or local holiday, it will be moved to the next working day. If this new expiration date is moved to the next month, the expiration date will correspond to the last business day of the expiration month. “.

In the case of February, since the 10th (expiry date of the ninth digit 1) falls on a Saturday (weekend), the deadline should run until the following Monday (12th), but since both Monday the 12th and Tuesday the 13th are carnival holidays, the obligation compliance is moved to Wednesday, February 14, the day ninth digits 2 and 3 must also submit their allowance. Digit 2 because although it was originally supposed to be on Monday the 12th, since the holiday moves it to the next working day (Wednesday the 14th

SRI will inform about any postponement of this schedule.