A reform of the Companies Act was announced. It explicitly states that the shareholders will not be responsible for the tax obligations of the company (Art. 27). In relation to managers, in a very lax and careless way, it indicates that the provisions of the law on that matter will be respected (Art. 65). Are the waters returning to their course?

The overload of the content of this legal figure, regarding the tax liability of third parties, became a serious fear when, with correato, the Organic Law for the defense of rights from the employment relationship was passed in 2012. In its essential part, he prescribed that when state institutions carry out forced collection of their debts, they will not only act towards the main debtor, but also subsidiarily towards all those obliged by law. With legal entities that are used for fraud, it will be possible to reach the last level of ownership and it will always fall to natural persons, who will answer with all their assets.

What you need to know about personal income tax in Ecuador

It was the anvil on which La Clementina was nailed, whose fate we watch with horror, as a post-truth continuation in which political perversion entered forbidden fields and inflicted deep injuries.

In August 2013, a lawsuit was filed against this cumbersome rule to determine its unconstitutionality, due to its form and content, but it was not until 2019 that the lottery was drawn up and established, and that at the current Constitutional Court. She has declared some of her articles unconstitutional, with which she has sheathed some of her most poignant blades.

Tax Justice Plan, under development

It limited the formidable coercion procedure, allowing enforcement against third-party assets to be enforced only subsidiary to the principal debtor; that is, the principal is charged first, then the third party. For cases of abuse of rights or fraud, which occur when a company or legal entity is used to commit illegal acts or for fraud, an enforcement court decision must be obtained beforehand. Judgment declaring and determining compliance with the specified condition. It recognizes this as an ideal tool and jurisdictional mechanism that allows for greater debate and adversarial rather than a very short coercive procedure, which is structurally designed for enforcement.

The current Organic Tax Law, Article 27, regulates this issue and states that, in the case of legal entities, the following are responsible for representation: directors, presidents, managers or representatives of legal entities and other collective entities with legally recognized personality. It should be read that, in addition to the principal or the taxpayer, any of the managers explicitly mentioned in the regulation is responsible for the tax liability. This tax liability is joint and several, it can be collected separately from the principal or responsible person. It is not a valid exception that collection efforts against the principal have not been carried out or have been exhausted. Immediately thereafter, it limits this liability to the assets it manages and the income generated during its management. (OR)