President Lenín Moreno signed Decree 617 December 18 to regulate the Law of Productive Development, which establishes the procedures for applying tax exemptions for income tax (IR), value added tax (VAT) and foreign exchange (ISD) in new productive investments. It also modifies the legislation on Public-Private Partnerships and establishes incentives for the development of services and technological products related to computer security. The Regulation has not yet entered into force. To this end, it must be published in the Official Gazette. This would happen in the next days.
The regulation establishes the procedures to apply the new tax provisions established in the Law of Productive Development. It delimits the processes and steps that the interested companies must follow in order to obtain these benefits. For this purpose, it defines the concept of investment, distinguishing between new and old, and giving differentiated treatment to both. It also optimizes the VAT and ISD refund scheme, with special emphasis on the export of services.
The regulation formalizes the elimination of the Minimum Income Advance Tax. At the same time, it promotes new tax exemptions to promote the development of new technologies, especially on digital infrastructure, computer security and e-commerce products. Finally, there are changes in the public-private partnership contracts, obliging the private sector to assume the costs of the studies associated with the design of the projects.