Obligations to be met in March 2019 in Ecuador

We remind that the following obligations must be met in March 2019:


Corporate:

• Regular Shareholders Meeting:

According to Ecuadorian regulations, companies in Ecuador must hold a regular shareholders meeting at least once every year within the three months following the end of the company’s fiscal year, namely, by March 31.






Labor:

• Payment of fourteenth remuneration – Coastal and Island regions:

       Workers are entitled to receive every month a bonus equivalent to one-twelfth of the basic minimum unified salary for workers in general which is US$ 394 in 2019.


If a worker has requested in writing to receive that sum on an accrued basis, it must be delivered not later than on March 15 in the Coastal and Island regions according to the time served by each worker.

• Profits calculation:

By March 31 of the current year, employers must calculate the amount of profits to be distributed among their workers.  Not later than on March 30 the workers must evidence their family dependents; otherwise, they will not be considered for profit distribution.  We remind you that the Labor Ministry has changed the period for profits calculation, which currently is 365 days[1].


Profits must be distributed by April 15 based on the duration of the work performed and on each worker’s family dependents.

• Economic compensation for decent salary:

Employers that have not paid all their workers an amount equal to or greater than the monthly decent salary must pay – by March 31 – an economic compensation to such workers who have not reached that amount.


This compensation is mandatory for companies or individuals who are obligated to keep accounting and that at the end of the fiscal year have obtained profits from that year and  during that period have paid income tax in advance lower than the profits.  For payment of such economic compensation, the employer must allocate up to 100% of the profits, if necessary.




So far, the amount of the decent salary for 2018 has not been determined.  It corresponds to the cost of a standard basket of essential satisfiers for a family, divided by the number of members in the home.




Taxation:

• Income tax filing and payment by individuals:

Individuals must declare and pay income tax in March in accordance with the following schedule:

[1]https://www.pbplaw.com/es/nuevo-priodo-de-calculo-para-la-particpacion-de-utilidades-de-los- trabajadores/