Ecuador - The Impact of the Tax Reform of Late 2009
Ortega Moreira & Ortega Trujillo, Abogados, Guayaquil
by Gustavo Ortega Illingworth
During the last two years, the Ecuadorian tax system has suffered substantial changes intended to increase revenue and decrease evasion. There is no doubt about the legitimate intent behind the reforms. Notwithstanding, the content of the amendments go beyond expected by introducing or eliminating provisions that violate principles of equivalence and proportionality recognized in the Constitution and the Tax Code. The tax reform of 2008, for example, introduced the need to issue a collateral to secure the fiscal interest of the lnternal Revenue Service as a condition to litigate a tax liability compromising the right of tax payers to a defense and eliminated the concept of the positive silence in administrative proceedings. The changes introduced in 2009 are no exception. In the following lines, we will discuss their impact and mechanisms to minimize it.
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