Am I supposed to file my net worth statement?

This question is usually asked at the beginning of each year when taxpayers do not know, in whole or in part, the conditions that must be satisfied and the information that must be reported to the Internal Revenue Service (SRI by its Spanish acronym).

To understand if it is necessary to file the net worth statement in May, one must be aware that this obligation arises if as of December 31 of the previous year:

  1. the total assets of natural persons are greater than US$ 223,400 (in 2016);
  2. the total assets of the common property of husband and wife are greater than US$ 446,800 (in 2016).

What and how must the net worth be reported?

This will surely be the next question after confirming that the obligation exists. For that purpose, the SRI has developed an app through the DIMM system where it is possible to complete in detail such information comprising deposits into local and foreign bank accounts, personal property, real property, vehicles, investments, shares of stock, household appliances, inventories for sale, intellectual property rights, among other assets.

If I am a foreigner or an Ecuadorian with no residence in Ecuador, am I supposed to file that report?

Those persons are not obligated to file their net worth statement.

When should I report my net worth information to the SRI?

The SRI has established a timetable for filing that information according to the ninth digit of the identity card or taxpayer registration of the person obligated to so report, as follows:

Ninth digit of identity card or taxpayer registration Deadline
1 May 10
2 May 12
3 May 14
4 May 16
5 May 18
6 May 20
7 May 22
8 May 24
9 May 26
0 May 28

What will happen if I fail to comply with my obligation to file my net worth statement?

The SRI is empowered to penalize such failure with a fine ranging from US$ 30 to US$ 1,500, without prejudice to continuing the obligation to so report.

Is it necessary to report information relating to local assets only, or also to those located abroad?

All information relating to ownership of assets, regardless of their location – locally or abroad – must be reported.

Who might be able to see the information reported by me?

According to a resolution, the Tax Authority has established that "the net worth statement as well as the information included therein shall be used for controlling purposes inherent to the Tax Administration and shall be strictly confidential."

What does unjustified private enrichment mean?

The Criminal Code defines unjustified private enrichment when "a person who obtains for himself or for another person, directly or through an intermediary, an unjustified increased net worth greater than two hundred unified basic salaries of workers generally, who will be penalized with imprisonment from three to five years."

What may happen to me if I file incomplete or incorrect information?

It is possible in this case that the authorities might consider the existence of tax fraud as defined in the Organic Criminal Code as follows: "A person who simulates, conceals, omits, falsifies or misleads a tax obligation in order to avoid paying in whole or in part the taxes actually owed for his own benefit or for the benefit of a third party shall be penalized (...)".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.