Ecuador has published Resolution No. NAC-DGERCGC20-00000055 of 4 September 2020, which establishes rules for registration, declaration, and payment of VAT by non-resident providers of digital services. Rules for VAT withholding on services provided by non-registered providers were issued at the end of August (previous coverage).
The latest resolution provides that non-resident digital service providers are VAT collection agents where:
In such cases, the non-resident provider, as the VAT collection agent, is obligated to:
Non-resident providers may voluntarily choose to register as VAT collection agents in the taxpayer registry (RUC). Requests for registration and applications should be made via email to email@example.com, which is also used to update information or cancel/suspend registration. Such registration will not imply that the non-resident provider has a permanent establishment in Ecuador.
After the registration process is complete, this will be indicated in the SRI's registry of digital service providers maintained on their website (www.sri.gob.ec). Given that the registry is updated on a quarterly basis, the effective date for VAT collection by a registered non-resident depend on the registration approval date as follows:
As part of a transition, non-resident service providers registered by 8 September 2020 are required to act as a VAT collection agent from 16 September (the effective date of the new requirements), with the next update provided by 15 January 2021 as above.
As with the effective dates of VAT collections, the effective dates of registration cancelation or suspension also follow the quarterly update schedule, with the final returns due for the month in which the updated registry is published to reflect the cancelation or suspension.
When registration as a collection agent is effective, returns are due on a monthly basis by the 15th day of the following month, with payment due the same date. If no digital services are provided in a particular month, a return must still be submitted indicating that no VAT for the month is due. Returns are required to be filed online through the transactional web portal of the SRI.
Failing to comply with the return filing requirements will result in certain penalties, including a penalty for late filing equal to 3% of the amount of VAT due per month or part of a month the return is late, up to a maximum of 100% of the VAT due. Non-filing may also result in the suspension or cancelation of registration.
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