globaltaxnews.ey.comSign up for tax alert emailsForwardPrintDownload |
15 January 2019 Ecuador’s Tax Administration issues new procedures for automatic application of benefits under a double taxation treaty Ecuador’s Tax Administration established the maximum amount of income to which benefits under a double taxation treaty (DTT) automatically apply, as well as new procedures for applying DTT benefits. The Tax Administration also established the procedure for the automatic qualification of DTT benefits by nonresidents. Before 1 January 2019, the maximum amount of income to which a nonresident could automatically apply DTT benefits was US$225,400. Beginning 1 January 2019, nonresidents may apply DTT benefits to a maximum of US$565,500. (For information on how the maximum amount is calculated, see EY Global Tax Alert, Ecuador establishes procedures for automatic application of benefits under a Double Taxation Treaty, dated 7 October 2016.) The automatic application applies if a nonresident has a tax residence certificate at the time of the withholding on all cross-border payments and at least one of the following conditions is met:
Automatic application does not apply if (1) the beneficial owner of the cross-border payment is an Ecuadorian individual or (2) the entity remitting the cross-border payment does not comply with the obligation to report the corporate composition. The nonresident may automatically apply DTT benefits if certain requirements are met. The Tax Administration is expected to issue regulations to implement the procedure for automatic qualification. Addvalue Asesores Cia. Ltda., Quito
Addvalue Asesores Cia. Ltda., Guayaquil
Ernst & Young, LLP, Latin America Business Center, New York
Ernst & Young LLP (United Kingdom), Latin America Business Center, London
Ernst & Young Tax Co., Latin America Tax Desk, Japan & Asia Pacific
Document ID: 2019-5065 |
