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Ecuador Introduces New Dividend Annex Form — Orbitax Tax News & Alerts

Ecuador's Internal Revenue Service (SRI) has announced the introduction of a new Dividend Annex (ADI Annex) form, which is effective as of the fiscal year 2020. One of the main changes is the simplification of the calculation for the withholding of income tax on the distribution of dividends. The taxable income is equal to 40% of the dividend actually distributed, with the company distributing the dividend to act as the tax withholding agent, applying a rate of up to 25% on said taxed income, according to Resolution NAC-DGERCGC20-00000013. Other changes include the addition of five new dividend codes that will allow the information to be better identified and simplify registration for the taxpayer, as well as a reduction in the number of fields to facilitate compliance.

As previously reported, the deadlines for the filing of the Dividend Annex (ADI Annex) were extended for the fiscal year 2020, with the deadline falling between 10 and 28 August 2021, depending on the taxpayer's tax ID number (RUC). This is confirmed in the SRI announcement.