Legal Alert 002-2019-EC: Modification to the Technical Data Sheet Annex of Operations With Related Parties

The Technical Data Sheet of Operations With Related Parties applies to companies that have operations with related parties, that are within the scope of reporting this information, and that the accumulated amount exceeds three million US dollars. (USD 3,000,000).

On May 31, this Technical Data Sheet was updated as well as the program, which can be downloaded at the following link: http://descargas.sri.gob.ec/download/anexos/opre/opre_1_0_13.zip

Among other aspects it had the following:

1. Check if the accumulated value of transactions with related parties is greater than USD 15,000,000 as seen below.

This information can be obtained from the preliminary results letter sent before your income tax return.

In case the operations are less than USD 15 million, up to the amount accumulated with related parties must be reported.

In case the operations are over USD 15 million, all the information that was being reported in the previous version of this Annex must be reported.

Remember that this information must be consistent with what is presented on form 101, Annual Income Tax Return lockers 003 through 029.

2. Code Relationship Assumptions: Although the codes are maintained, the change in the wording of Code 21 implies a new linking criterion since it would include companies that have in their payroll family members of shareholders with participation greater than 25%. The following is a comparison of the cases of attachment in the Annex:

Code	Before	After
17	A company with respect to the spouses, relatives up to the fourth degree of consanguinity or second degree of affinity of the partners, managers, administrators or commissioners of the company.	A company with respect to the spouses, relatives up to the fourth degree of consanguinity or second degree of affinity of the directors, administrators or commissioners of the company.
21	Companies in which the same partners, shareholders or their spouses, or their relatives up to the fourth degree of consanguinity or second affinity, participate directly or indirectly in at least 25% of the share capital or own funds	Companies in which the same partners, shareholders or their spouses, or their relatives up to the fourth degree of consanguinity or second affinity, participate directly or indirectly in at least 25% of the share capital or own funds or carry out commercial transactions , provide services or are in a dependency relationship.
23	When a natural person or company, domiciled or not in Ecuador, performs 50% or more of its sales or purchases of goods, services or other operations, with a natural person or company, domiciled or not domiciled in the country.	When a natural person or company, domiciled or not in Ecuador, performs 50% or more of its sales or purchases of goods, services or other operations, with a natural person or company, domiciled or not domiciled in the country. For the consideration of related parties under this numeral, the Tax Administration must notify the taxpayer, which, if applicable, may demonstrate that there is no relationship by address, administration, control or capital.
14	The parties, in which the same group of shareholders, for their shareholding contribution, participate interchangeably, directly or indirectly in the management, administration, control or capital of these.	The parties, in which the same group of members, partners or shareholders, participate interchangeably, directly or indirectly in the management, administration, control or capital of these.

3. Country code: the following territories are incorporated:
   1. Zona libre de Ostrava.
   2. Archipiélago de Svalbard.
   3. Bonaire, Saba y San Eustaquio.
   4. Campione d’Italia.
   5. Checoeslovaquia
   6. Isla de Ascensión
   7. Isla Qeshm
   8. Islas Azores
   9. Labuan
   10. Madeira
   11. Saint Barthelemy
   12. Sint Maarten (Dutch Part)
   13. Tristan da Cunha
    
4. Operation codes that were removed:
   1. [307] Other assets
   2. [401] Other liabilities
   For more detail in the following link: Technical Data ANNEX OF OPERATIONS WITH RELATED PARTIES ANNEX OPRE.