New regulation on advance payment of retained earnings
On 28 October 2025, the President of the Republic of Ecuador, Daniel Noboa Azín, issued Executive Decree No. 191, published in Official Gazette No. 153, issuing the General Regulations to the Organic Law of Social Transparency. This new regulatory body incorporates provisions that regulate the calculation, declaration and payment of the advance payment on undistributed profits, establishing a clearer and more structured framework for companies subject to this obligation.
ECIJA Ecuador highlights three key aspects of the new regulation:
- Payment deadline: The advance payment corresponding to the fiscal year 2025 must be declared and paid until November of this year, following the schedule for the expiration of the Income Tax withholdings for the period September 2025.
- Payment facility: Payment may be deferred in two equal instalments, payable in the months of November and December, without the option of additional payment agreements.
- Important exclusions: Exempt from payment are holding companies and profits that entities of the financial or insurance system are not allowed to distribute by mandate of their controlling entity.
The regulation also details the method for calculating the advance payment, which must be based on the income tax return corresponding to tax year 2024, filed until 31 July 2025, without considering substitute or amending returns.
From the Tax area of ECIJA Ecuador, we are accompanying our clients in the analysis of the impact of this regulation and in the implementation of strategies for its correct compliance, within the current legal framework.
