Issue the rules for the implementation of the automatic exchange of information and approve the annex of non-resident financial accounts.

Resolution No. NAC-DGERCGC23-00000031

Background:

Ecuador has been part of the GLOBAL FORUM on Transparency and Exchange of Information for Tax Purposes since April 26, 2017.

This is a multilateral body that leads the work on transparency and exchange of tax information. It has 150 member countries.

The first general provision of the Organic Law for the Reactivation of the Economy, Strengthening of the Dollarization and Modernization of Financial Management stipulates that the Internal Revenue Service and the Superintendency of Banks shall issue the secondary regulations for the implementation of the actions or compliance with the requirements derived from the adhesion.

Based on the accession to such forum, Ecuador shall implement the tools to facilitate the exchange of information according to the COMMOM REPORTING STANDARD (CRS) published on March 7, 2017. This report defines the type of financial information to be exchanged, the financial institutions required to transmit such information, the different types of accounts, the taxpayers involved, as well as the reasonable common due diligence procedures that financial institutions must follow.

Through this adhesion, the Tax Administration seeks to strengthen tax collection and the fight against tax evasion.

Resolution – most relevant aspects

The Non-Resident Financial Accounts Annex (hereinafter, CRS Annex) is approved.

Reportable financial institutions: Custodial institution, depository institution, investment entity or insurance company.

Financial institutions not subject to reporting: Public agencies, Retirement funds, Credit card issuers. Collective investment vehicle, trusts and branches of an Ecuadorian company abroad.

What information is reported?

The name, address, jurisdiction of residence, date and place of birth of the account holder, account number, the balance or total value of the account in effect at the end of the calendar year, interest, dividends.

Financial institutions required to report ANNEX CRS must submit this annex annually in the month of May, according to the ninth digit of the RUC, in which information for the fiscal year from January 1 to December 31 will be reported.

First General Provision: The Internal Revenue Service, in its capacity as competent authority, shall exchange the information received from taxpayers obliged to submit information, in accordance with the applicable international instruments and the domestic regulations in force.