On February 7, the Internal Revenue Service (IRS) issued a resolution to implement OECD standards for the exchange of tax information. These standards will be applied to tax information of Ecuadorian taxpayers to fight against tax evasion. The resolution also establishes new tax information requirements for resident and non-resident financial institutions. It will enter into force upon publication in the Official Gazette, which is expected within the coming days.
The resolution adapts the regulatory framework to the international requirements arising from Ecuador’s endorsement to the Global Forum on Transparency and Exchange of Information for Tax Purposes. To this end, it establishes mechanisms to facilitate the automatic exchange of tax information. It also establishes new tax information requirements that domestic and foreign financial institutions must comply with. They must report annually to the SRI all information regarding interest, dividends, account balances, income or income derived from the sale of assets.
This resolution is a new step in Ecuador’s alignment with the OECD. It began in November 2018 when President Lenín Moreno signed Decree 561 to begin the OECD accession process. Since then, a special committee, led by Economy Minister Richard Martinez, is working to develop the necessary policies to enable such membership.