Accountancy in Ecuador

>> Allowances in Ecuador

Depreciation and amortization

5% Buildings, 10% furniture and equipment, 20% vehicles and 33% computation equipment. The deferred assets amortize to 20%, the method uses is straight-line amortization, and any other method requires express authorization.

Losses carry forward

Net losses can be carried forward to the five years following the year the tax loss was incurred. The use of the carry forward in each year should not exceed 25% of the annual taxable income. Any remaining balance after the fifth year will be lost.

Tax payments and income tax return

The tax year is the calendar year.

Tax credits

The Add Value Tax (VAT) in purchases is constituted a tributary credit applicable to the VAT sales.

Free trade zones

These zones offer exporters the possibility to import free of customs duties, statistics rate and VAT, all the necessary equipment to build operations within the zones. Furthermore, exporters manufacturing within the zones enjoy the benefit of buying supplies and raw materials from third countries, without having to pay duties or taxes that lead to increased prices. Goods may remain in the zone for a maximum period of 180 days, which can be prorogues only for more 1 time for 180 days.

Goods have to be export in the period mention above and for Free Trade Zones otherwise, the goods have to be nationalized with the payments of duties and taxes.

Also, in this category has Commercial Deposit which is a variation of Free Trade Zones. The company import or purchase the materials and according to the necessities in the elaboration of the product, releasing from Commercial Deposit. When they have the final product, it must be export in order to get the benefits of this Deposit. Currently, there are free trade zones in Quito, Guayaquil, Cuenca, Manabí, Esmeraldas, El Oro and Manta.

Latest version updated 11th April 2019

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$ 103.06