|If you are doing paid work in Ecuador you need to pay income tax and possibly VAT which is called IVA (Impuesto al Valor Agregado) here.
Registering with the tax office.
First you need to go to your local tax office and register. The revenue service in Ecuador is called the SRI (Servicio de Rentas Internas) and there is an office in all major cities and some smaller towns.
To register you need to take your Ecuadorian ID or if you don’t have one, take your passport with the relevant visa stamp. You will need to explain your area(s) of work. You also need to provide an address and notarised documentation to confirm you are either the owner (i.e. title deeds), tenant (rental contract) or a visitor living rent free (letter from the home owner with a copy of their ID.
If everything is in order the clerk will register you and create a unique ID number which is the same as your Ecuadorian /foreign ID + the digits 001.
If you don’ t want to do this by yourself you can be accompanied or even authorise another person to make the visit on your behalf (by means of a notarised letter). If you do go, take a book as it could be quite a long wait, at least in Guayaquil. Best time to arrive: 15:30. Last entry: 16:00. The good thing is they give you a ticket so if you see there are 100 people in front of you then go for a coffee.
Getting your invoices
Once you have the printed confirmation of your registration you can request an invoice book (libro de facturas). To do this if you have to go to an authorised printers which are two a penny in towns and cities. Look for the sign outside which says SRI facturas. You can choose the style but it’s best if you keep it simple: personal or business name, no smaller than A5, 50 or 100 copies (price is virtually the same) and carbon copy paper. You have to renew them every year anyway but that should save you having any other problems.
Filling out an invoice
Unless you are an employee on a personal contract you will be providing professional services or selling products and will have to fill out an invoice to receive each payment. Anyone who works in HR or finance can probably help you with that part. Sometimes people try to make it easier for foreigners by taking the block of invoices with your signature and completing them as necessary. Remember that you need to get your copy back and hold onto it for 7 years – make sure it is complete.
If you make even the smallest mistake on the invoice then it won’t be accepted. That is why you need plenty. Draw a line through it, write ANULADO and file both copies. Ecuadorians are very officious about mistakes and smudges – if you accept that philosophy from the outset (and be careful) it will make your life easier.
IVA is 12% which in most cases should be added to the cost of your services to give a final total. Some professionals such as teachers don’t have to deduct IVA from their earnings.
Making tax declarations
You can make declarations online or in a bank. If you have to make a payment you have to go to a bank or set up a debit agreement with the SRI.
Making a declaration of IVA
Depending on your line of work your IVA declaration will be monthly (menstrual) or six-monthly (semestral). This will be indicated on the document the SRI give you. If you are invoicing more than $100,000 a year then you need to account for your income and expenditure which is called llevar contabilidad in Spanish and this is also indicated on the document. It means you have to fill in form 104 – the rest of us fill in form 104A. During 2012 you can make the declaration in a bank or on a form purchased from the same printers who produce invoices (look for the sign SRI formularios). Remember –no errors –use the practice page at the back before you complete the original and carbon copies. From 2013 there will be no paper forms and all declarations must be made online. The forms look exactly the same.
The staff in the SRI in Guayaquil are helpful and can help to fill in a copy of each form correctly.
CLAIMING BACK VAT WHEN YOU LEAVE ECUADOR
|When you pay for goods or accommodation in Ecuador it is normal to pay IVA ( a value added tax). Tourists can request a refund of this money. However there are a few points to note.
You can only request a refund on purchases from affiliated places (which should be displaying the logo below. I think this program is new and at the moment the majority of partners are hotels. On the SRI website www.sri.gob.ec , you can find a list of affiliates Here is the link. If it doesn´t work, copy and paste the routing. (Inicio / Devolución de Impuestos/ Devolución de IVA / Devolución de IVA a Turistas Extranjeros / Establecimientos afiliados )
When you leave the country there should be a desk in the airport in Guayaquil or Quito where you can put the form, a copy of your passport, the original invoices and “anexos” in an envelope and post it. However when I was in Guayaquil airport the desk was unmanned and paperless. So take an envelope just in case.
You will receive your refund in a maximum of 120 days. You can check the progress of your request by entering the website using your passport number as ID. Here is the link.
If it is broken, go to the SRI website, select Consultas Publicas and scan down to Devolucion de Impuestos a Turistas Extranjeros.