Ecuador's tax authority allows for a variety of personal expenses, including unsecured loan interest and domestic employee salaries, to reduce income tax liability for workers in dependent relationships.
Ecuador's tax authority, the Servicio de Rentas Internas (SRI), has announced new guidelines that allow various personal expenses to reduce income tax for workers in dependent employment. These guidelines detail specific expenditures that can be included in tax deductions, highlighting the importance of personal finance management for taxpayers. Among the qualifying expenses are those related to food, health, education, housing, clothing, and national tourism, which serve as a means to lower tax obligations.
Notably, the SRI has expanded the categories of deductible expenses to encompass not only common items like household expenses but also specific costs such as pet care, unsecured loan interest, and salaries for domestic employees engaged in non-economic activities related to the taxpayer. This development, communicated on February 6, aims to ease the financial burden on taxpayers and enhance compliance with tax regulations by encouraging the documentation of personal expenses.
As taxpayers prepare for the 2025 tax year, understanding these new regulations will be crucial for making informed decisions about their expenses. The initiative reflects a broader trend towards tax reform in Ecuador, aiming to provide relief and clarify the tax obligations of individual workers while incentivizing spending in targeted sectors.
