These are the changes, in economic matters, that will govern in 2022

As of January 1, 2022 With the new fiscal year, several of the changes established in the Economic Development and Fiscal Sustainability Law, other previous tax reforms and even executive decrees come into effect.

The Government estimates that in its entirety, with the rule published in November 2021, it will be possible to collect until 2024 about $ 1.9 billion to oxygenate the treasury. But in 2022 alone, about $ 800 million would be raised.

The most important changes brought by the Economic Development Law are the new determination of the income tax (IR) (with which it is expected to collect $ 100 million in 2022) and the temporary contributions for companies and individuals (which would yield $ 467 million and $ 261 million in 2022).

How much will those who earn more than $ 2,000 a month pay in income tax in Ecuador?

Regarding personal income tax, as detailed in the norm, by 2022 a new section is increased in the progressive table, reaching 37% when the tax base exceeds $ 100,000; before it reached 35%.

Thus, since January, Ecuadorians who earn more than $ 2,000 per month and who are under a dependency relationship, will begin to see a greater discount in their salary due to the IR concept, pointed out the tax expert Javier Bustos.

This occurs because in the declaration to settle the IR, for fiscal year 2022, which will be in March 2023, natural persons they will not be able to deduct their personal expenses. Rather, they may apply a tax credit, which limits the amounts to be discounted.

To make this calculation, the gross income must first be established (all remunerations, including tenths, reserve funds). It should be checked if all this exceeds the value equivalent to 2.13 basic fractions ($ 24,090.30).

If your income does not exceed this value, then 20% of personal expenses may be deducted from the tax and if it exceeds it may be only 10% of said expenses. However, this discount has a limit that is the value equivalent to seven basic baskets determined by the National Institute of Statistics and Censuses (INEC).

As of November 2021, the basic basket of the INEC is $ 715.31, a figure that if we multiply by seven gives $ 5,007.17.

To establish the tax, all the wages that correspond to the worker must be added, except the thirteenth and fourteenth and deduct the values ​​of the Social Security contribution. The payment table that has a fixed tax fraction and a percentage that is applied to the surplus must be applied to that value.

The result obtained will be deducted from the reduction for the projection of personal expenses. That is the tax payable.

According to the regulations of the law, which was issued on December 29, the personal expenses that will be considered for the calculation of the reduction correspond to housing (rents, mortgage interest, basic services), health (medical fees, medicines, glasses , prosthetics, medical insurance, deductibles), education (tuition, pensions, uniforms, supplies, art and culture), food (food purchases and prepared meals in restaurants), clothing and tourism (in registered and licensed establishments).

Temporary contributions

Additionally, within the Economic Development and Fiscal Sustainability Law, it was determined the payment of a contribution, for two years, of 0.8% for companies with equity greater than $ 5 million as of December 2020.

The law too fix a special contribution, for one year, for individuals with assets of more than $ 1 million and $ 2 million, if they are considered conjugal partnerships.

Both contributions must be declared and paid until March 31, 2022 Both are subject to payment facilities for a maximum of six months.

The new regime for microentrepreneurs (Rimpe)

Any subject who enrolls in the Single Registry of Taxpayers (RUC), as of January 1, 2022 (except in cases of exclusions) will be within the Simplified Regime for Entrepreneurs and Popular Businesses (Rimpe).

The Rimpe, ‘a mix’ between RISE and RIM, generates expectations for its early entry into force

This new regime will be applied to businesses and enterprises with income from $ 0 to $ 300,000. These, in turn, are divided into two segments, Those from $ 0 to $ 20,000 fall into the category of popular businesses, while those from $ 20,001 to $ 300,000 are startups.

In the event that in the first year the subject exceeds lthe $300,000 gross income will be submitted to the general regime from the following year.

Between the 11 activities excluded from the scheme include agricultural companies, fuel marketers, capital income and transportation.

The tax table It forces businesses with incomes of up to $ 20,000, $ 60 a year, an equivalent of $ 5 a month, to pay. The payment rate then goes from $ 60 to $ 2,797 (when it is a segment that has income from $ 200,000 to $ 300,000. But there is also a marginal payment that goes from 0% to 2%.

Among the details to be taken into account, and that are published on the page of the Internal Revenue Service (SRI), is that This regime will be valid for three years.

New deductible expenses of companies

Among the new items that are modified, added and that will be in force as of 2022 are:

Additional deduction of 150% in advertising, promotion and sponsorship expenses made in favor of athletes, programs, projects or sporting events.

Additional deduction of 150% in expenses for the organization and sponsorship of artistic and cultural events and for the production and sponsorship of cinematographic works.

Additional deduction of 100% for donations, investments and / or sponsorships in favor of programs, funds and projects of prevention, protection, conservation, bio-enterprises, restoration and environmental repair duly qualified by the environmental authority.

Additional deduction of 100% in the depreciation and amortization of machinery, equipment and sustainable construction technologies.

Other changes that govern and are expected fora 2022

• The new salary, of $ 425, applies from January 1, 2022, for the worker in general, including those of the small industry, agricultural sectors, maquila, paid people from the home, handicraft workers and collaborators of the micro-enterprise.

The base salary of $ 425 will be effective January 1, 2022

• With the salary increase, the contributions to the Ecuadorian Social Security Institute (IESS) of the affiliates, traffic fines, infractions and alimony also rise.
• The central bank of Ecuador (BCE) presented the new methodology for him calculation of the interest rates that will be in force in the country from January 1, 2022 and will be applied for new credits. It takes four components into account to establish the maximum interest rates: cost of funding, operating expenses, credit risks and cost of capital. The new formula will apply to six of the 13 credit segments that exist today. These are: business, SMEs, consumer and three categories of microcredit, which differ from each other by the amount of the loan.
• By March 2022, also, companies must cancel the third installment of the Unique and Temporary Contribution (CUT), established in the Productive Development Law. This is governed by a progressive table from 0.10% to 0.20%, calculated on taxable income as declared in 2018.
• The definition of the 12 days in the year in which the general rate of value added tax (VAT) will be reduced by four points for the benefit of the tourism sector.
• The progressive reduction of the foreign currency outflow tax (ISD), at a rate of 0.25 points per quarter. This starts on January 1st. (I)