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Ecuador Issues Circulars on Refund of VAT and Remittance Tax for Exporters — Orbitax Tax News & Alerts

The Ecuador Internal Revenue Service (SRI) has issued Resolutions NAC-DGERCGC19-00000015 and NAC-DGERCGC19-00000016 of 5 April 2019 regarding the refund of value added tax (VAT) and remittance tax (ISD) for exporters in connection with the law to promote production, investment, and employment.

With respect to VAT, it is provided that exporters are allowed to request a refund on a monthly basis in one of four ways:

  • A provisional automatic refund based on information recorded by the SRI, in which case a refund is made within 20 days of request;
  • A provisional refund through the automatic offset of VAT withheld;
  • A refund based on coefficients established by the SRI based on information on prior transactions carried out by exporters; or
  • An exceptional refund, such as in cases including special customs regimes, VAT on fixed assets, or VAT accumulated under a merger or acquisition.

With respect to ISD, it is provided that exporters are allowed to request a refund on a monthly basis, provided that:

  • A refund request is submitted once the goods are effectively exported;
  • The refund is only for amounts not already offset through a tax credit or deduction;
  • And the refund proportional to the foreign income obtained in relation to the export.

In addition, it is clarified that the refund of ISD is not available in relation to hydrocarbon and non-renewable resource activities.

For both VAT and ISD refunds, requests may only be made to SRI through the use of official forms and all relevant documentation must be included.

Both resolutions are in force from 5 April 2019.