I. Legal Updates

1.- General Regulation of the Organic Law to Boost the Violet Economy

Source: Second Supplement of the Official Registry, No. 444
Date: November 24, 2023
The “General Regulation of the Organic Law to Boost the Violet Economy” in Ecuador includes provisions aimed at implementing labor measures and policies promoting gender equality.

Among the various sections of the regulation, there is one concerning the implementation norms for “Equality Plans and Related Procedures.”

The obligation to establish Equality Plans and Related Procedures under the “General Regulation of the Organic Law to Boost the Violet Economy” in Ecuador falls on companies with fifty or more workers.

These companies are required to develop an Equality Plan, a set of measures intended to achieve equal treatment and opportunities between women and men and to eliminate gender-based discrimination.

We invite you to review the full text of this regulation.

Click to read the complete regulation

2.- Methods for Valuing Initial and Final Balances for Identifying Unjustified Wealth Increase (IPNJ) for Presumptive Income Tax Assessment

Source: Resolution No. NAC-DGERCGC23-00000033
Date: November 23, 2023
The Resolution NAC-DGERCGC23-00000033 issued on November 23, 2023, by the General Director of the Internal Revenue Service of Ecuador, establishes methods for valuing initial and final balances in the determination of Unjustified Wealth Increase (IPNJ) for Income Tax calculation.

These methods apply exclusively to natural persons residing in Ecuador when an unjustified wealth increase greater than ten basic tax-free units of income tax for the corresponding year is identified. It also includes provisions for the valuation of assets, liabilities, consumption, and expenses and establishes specific rules for cases of marital union or legally recognized de facto union.

The resolution sets forth two primary methods for calculating wealth increase: the Wealth Method and the Income Use Method. The former is based on wealth variation (difference between the initial and final balance of wealth), while the latter focuses on the relationship between income (taxable, exempt, and non-subject) and the taxpayer’s consumption, expenses, savings, and investment.

Click to read the complete regulation

II. New Article in Our Blog

Analysis of Possible Reforms to the Internal Tax Regime Law with the Potential Enactment of the Organic Law of Economic Efficiency and Employment Generation

On November 27, 2023, the President of the Republic of Ecuador, Daniel Noboa, submitted to the National Assembly the Organic Law of Economic Efficiency and Employment Generation (LEEGE) project.

The LEEGE project has a structure of two books; the first focuses on reforming various legal bodies such as the Internal Tax Regime Law, Tax Code, and others. The second book contains the norms creating the public-private partnership regime.

On this occasion, as our law firm analyzes the LEEGE project, we have prepared a comparative document on the reforms that would apply to the Internal Tax Regime Law (LRTI).

Click to read the complete LEEGE project
Click to read the analysis document on the reforms to the LRTI

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Contact Information:

Abg. Miguel Ángel Saltos | Email: miguel.saltos@lince-saltos.com | Phone: (+593 4) 2630313