Instalment payment of income tax on undistributed profits

ECIJA Ecuador’s Tax and Investment Practice Group has published a new briefing note on the advance payment of income tax on undistributed profits, a tax obligation introduced by the Organic Law on Social Transparency, which imposes new responsibilities on certain companies in Ecuador.

This measure establishes a mechanism for the advance payment of tax applicable to undistributed profits; it is therefore essential that companies understand the scope of the legislation and assess its impact on their tax and financial planning.

Our briefing note analyses the main aspects of the new regime, including the entities subject to the obligation, the calculation methodology, the applicable rates, the rules on set-off and refunds, as well as the deadlines for filing returns and making payments in respect of this tax liability.

It also sets out practical considerations to help companies determine whether they are subject to this regime and take the necessary steps to ensure timely compliance with their tax obligations.

We invite you to review our information note to gain a detailed understanding of how the advance payment of income tax on undistributed profits works and the key aspects that companies must consider for its correct application.