Reminder of Obligations in March 2020

We remind that the following obligations must be met in March 2020:

• Annual Shareholders’ Meeting:

Companies in Ecuador must hold an annual shareholders’ meeting at least once a year, within three months after the end of the company’s fiscal year, i.e. by March 31.

• Payment of the 14th Salary – Coast and Galapagos Islands

Employees are entitled to receive a monthly bonus equivalent to one twelfth of the average consolidated basic salary. In 2020 the basic salary is USD 400.

If the employee has made a written request to receive the sum as an accrued payment, this must be paid by March 15 in the Coast and Galapagos Islands regions. The amount to be received will depend on the time worked by each employee from March 1, 2019 to February 29, 2020.

• Calculation of Profits

Employers must calculate, up to March 31 of the current year, the profits to be distributed to employees. Employees must register dependents by March 30 otherwise these persons will not be considered for purposes of profit distribution.

Profits must be paid out by April 15, based on time worked and number of dependents of each employee.

• Economic Compensation for a Living Wage

Employers who have not paid all their employees a sum equal to or greater that the monthly living wage have until March 31 to pay compensation to employees who have not obtained this wage.

This compensation is mandatory for companies or individuals who are obliged to keep accounting records, who had profits at the end of the fiscal year and, in the fiscal year, have paid an income tax advance payment which is less than profits. To pay the compensation, the employer must allocate up to 100% of profits, if necessary.

The living wage for 2019 has not yet been established; this corresponds to the cost of the basket of goods divided by the number of recipients in the household.

• Declaration and Payment of the Single Temporary Contribution 2020

Companies, including branches of foreign companies resident in the country and permanent establishments of non-resident foreign companies, who perform economic activities and in fiscal year 2018 generated taxable income of USD 1 million or more (including companies under the single income tax system)  must pay  the Single Temporary Contribution ordered in the Law for Simple Taxation. This year, the declaration must be filed and paid through Form 124 between February 01 and March 31, 2020.

• Individual Income Tax Return

Individuals must declare and pay income tax in March, according to the 9^th digit of their Taxpayer Registration Number (RUC) or ID card number: