Ecuador: REGULATIONS TO THE NEW TAX ON NON-RETURNABLE PLASTIC BOTTLES
Last November 24th, Executive Decree No.929 was published in Ecuador, establishing the procedure for purposes of reporting and paying the Tax on No-Returnable Plastic Bottles (“PET” bottles) (“IRBP”) established by Decree-Law No. 877, as well as the requirements, conditions, and limits applicable to payments to transformer recyclers.
These regulations apply at the national level to all the entities and persons subject to this tax.
Taxpayers shall report all taxable transactions within the first 5 days of the subsequent month following the one in which the taxable event took place. Also, importers shall report and pay the tax in the relevant Customs Tax Return prior to the dispatch / release of the goods by the Customs Authorities. Taxpayers who do not comply with their reporting obligations or who do so in an untimely manner, shall be also subject to interest on tax arrears and applicable penalties.
Bottling entities shall file the monthly tax return regardless of whether they bottled beverages in Non-Returnable PET Bottles or not. Importers of Beverages-in-PET-Bottles subject to this tax shall liquidate it with the Customs declaration each time the relevant import is made.
Regarding the PET-Bottles Recycling Payment, this Executive Decree provides that the Regulatory Authorities shall issue the administrative act containing the requirements and methodology for the transformer recycler qualification and registry process that grants the right to request the payment of the IRBP Tax, which shall include the supporting documents of the purchase of national material along the entire value chain, from the base recycler to collection centers that are part of the material supply chain.
The payment requests related to PET bottles’ recycling shall be made on a monthly basis before the Tax Authorities, and must be solved within 30 business days of the entry acceptance date. Upon approval, the payment shall be accredited without interest. Ifthe exact number of collected bottles cannot be determined, it shall be assessed by applying the specific formulas thereby included. Also, the accumulated value to be paid to the transformer recycler shall never exceed the tax amounts collected in the relevant given monthly period. They shall be the ones in charge of the payments for the recycled material to those involved in the recycling chain.
The PET bottles’ recycling payment requests requirements are: (i) Updated Transformer Recycler Registry and Authorization Certificate issued by the Regulatory Authority; (ii) The monthly report of the number of the bottles recollected or recovered in a month, or the equivalent in kilograms issued by the Regulatory Authorities. The said documents shall be digitally filed and certified by the applicant.
The Executive Decree Specifies that transformer recyclers that intend to purchase material to collection centers or use intermediation chains for the provision of plastic bottles, must verify that they hold the corresponding environmental permit for the non-hazardous material stockpiling.
The Tax Authorities shall issue the resolutions for this tax reporting and payment obligations within 1 month as of November 24th, 2023, and also within 3 months of said date they shall issue regulations related to the possibility of accessing to the right to payments for bottling recycling for transformer recyclers.
Until the new regulations to be issued come into effect, Resolution NAC-DGERCGC17-00000565 of 2017, as amended, shall continue to be valid.