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Ecuador: New Rules on Amending a Tax Return

(Nov. 16, 2016) Ecuador published a resolution from the national Internal Revenue Service (Servicio de Rentas Internas or SRI) in the country’s official gazette issue of October 31, 2016. The resolution, which was immediately applicable, contained regulations on amending a tax return.   (Gustavo Guerra, Ecuador: Regulations to File Amending Tax Returns, TAX NEWS SERVICE (Nov. 10, 2016), International Bureau of Fiscal Documentation online subscription database (IBFD); Resolution NAC-DGERCGC16-00000448 Expídense las normas para la presentación de declaraciones sustitutivas [Resolution on Rules for the Submission of Substitute Declarations], REGISTRO OFICIAL, Second Supplement No. 873 (Oct. 31, 2016) (table of contents of the Registro Oficial issue).)

The new rules state that tax returns may be amended in order to correct errors within the year following the original filing, provided that

  • fiscal obligations, taxes, advance payments, and/or withheld taxes are not modified;
  • there is an increase in either the tax loss or a tax credit; or
  • there is a change that benefits the taxpayer. (Guerra, supra.)

An amended tax return can be submitted without any time limit if

  • there is a reduction in the tax loss or tax credit;
  • a law or decree exempts the taxpayer from income tax advance payments or reduces the amount of those payments as calculated previously by the taxpayer;
  • a transfer of income tax advance payments from a prior year is necessary; or
  • any other amount submitted on the original tax return is to be amended, but the change does not reduce the amount of tax owed. (Id.)

Furthermore, as long as the SRI office has not begun any procedure involving the tax return, that return may be amended at any time if a higher amount of tax is owed. If an SRI control process is underway that requires that a tax return be amended, an amended return can be submitted in which only the parts that the SRI asked to be modified have been changed. (Id.)

If the SRI finds mistakes in tax payments, a notification will be sent to the taxpayer, without regard to any penalties. The taxpayer is then required to submit an amended return within ten days and to pay any interest owed or fines imposed. (Id.)