Transfer Prices in Ecuador, regulations and formal obligations demanded by the SRI

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Currently, the Servicio de Rentas Internas de Ecuador (SRI) (Internal Income Service) demands the Income Tax passive subjects to hand in documentation related to the operations or transactions executed with (national and/or foreign) related parties with the aim of showing that the agreed prices are at the market value.

Legal Basis
Article 66-1 of the Regulations to Apply the Law of the Internal Tax Régime.
Resolution No. NAC-DGERCGC15-00000455.

Compulsory Taxpayers
1. Those subjects who have performed operations with some related parties local and/or domiciled abroad within the same fiscal year for a total amount higher than three million American Dollars (USD 3’000.000,00), will have to present to the SRI, the Operation Annex with Related Parties.
2. If this amount is higher than fifteen million American Dollars (USD 15’000.000, 00), these passive subjects will have to present, additional to the Operation Annex with Related Parties, the Integral Inform of Transfer Prices.
Information to declare

Some relevant aspects that will have to be mentioned are:
• Type of operation performed.
• Type of relationship with the foreign entity.
• Method of transfer prices applied to each operation performed.
• Price or profitability margin associated to the operation performed.
• Financial results for the type of operation at the taxpayers’ global activity level.

Date of presentation:
The date of presentation of the Annex and/or Integral inform of the transfer prices is given in accordance with the ninth digit of the RUC in the month of June of every following year to the declared period.

Infractions and penalties
The lack of presentation of the annex and information or If the presented one has some mistakes or differs from the Income Tax Statement, will be penalized by the Tax Administration with a fine up to USD 15.000. It is important to remark that the information presented by the taxpayers, in accordance with this article, has the “reserved” character.



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