Goods and services with a 0 rate in Ecuador refers to some products or, as its name indicates, goods that do not pay VAT and said services or products are assigned a 0% rate in relation to VAT since they are exempt from this payment responsibility.
Goods and services with rate 0
In relation to this concept and as we have already established in previous paragraphs, goods and services with a 0 rate in Ecuador, are products and services with 0 VAT or what is the same, they do not generate cancellation of such tax and their rate is 0%.
In this article we are going to mention a list of the items that when they are marketed do not generate VAT cancellation or that are exempt from said payment.
What is VAT?
With these acronyms is known the Value Added Tax, which becomes the tribute or tax of a product or service in the different forms of production of the same.
This Value Added Tax (VAT) is levied on the value of the domain pass or importation of movable goods that have bodily status in their different stages of being marketed and also on property rights, copyright, industrial property and rights. related and services provided.
Regarding the rate that is generated from this tax, we can mention that there are two in a basic way and they are 12% and 0% rate. For further illustration of the reader we are going to mention a list of products and services that are exempt from VAT or that have a VAT rate of 0.
Products with VAT 0%
We must first ask ourselves the following question. What are goods and services with tariff 0 Ecuador?. The answer is described below. They are those that are in their natural state or that do not suffer from any type of modification when they are marketed in their original or natural form.
According to the aforementioned, the products that we mention below do not generate payment of Value Added Tax (VAT) or have the particularity of having VAT rate 0, and are the following:
Among these food products are those of agricultural, poultry, livestock, beekeeping, bio-aquatic, rabbit, forestry, meat in its natural state and sausages and fish origin that can be kept in their natural state or, in other words, that they are not subject to elaboration, process or treatment that requires variability of its nature.
Only the process of refrigeration, freezing and cooling so that they can be preserved, the piling, crushing and extraction of mechanical or chemical means for the creation of edible oil, cutting and slaughtering are not considered processing.
In the same way, the milk of national production, both natural, homogenized or pasteurized or powdered. Cheeses. Yogurts. Formulated milk, protein for children.
Bread, sugar, oatmeal, panela, salt, lard, cornstarch, flour for human consumption, tuna, sardine, trout, mackerel, national canned food, edible oils, except olive oil.
Medications and drugs for human use also fall into this group, in accordance with the lists generated by Decree of the President, which are generated annually, as well as raw materials and items imported or acquired in the domestic market. for your production.
Containers and labels of imported type or that are acquired in the local market and are used specifically in the creation and manufacture of medicines for human or veterinary use.
Other items that also fall into this group are: bond paper, newsprint, books, magazines and other materials that are marketed together with the books.
Another number of items that are grouped in this case are those that are introduced into the country and which are:
- a) Foreign diplomats and personnel of international, regional and subregional organizations, if they are free of duties and taxes.
- b) Passengers entering the country, up to the cost of the excess accepted by the Organic Customs Law itself and its regulations.
- c) In cases of donations that come from abroad and are made in favor of State agencies or institutions and those of a cooperative nature with institutions of the State itself.
- d) Goods that have the character of income temporarily or in transit, and that enter the country, as long as they do not have a nationalization figure.
- e) Electric energy.
- f) Fluorescent lamps. Airplanes, helicopters, light aircraft that are designated for the commercial transport of passengers, cargo and services.
In the same way, items that are brought into the country under the international postal traffic and express mail regime, provided that the FOB value related to the shipment is a minority or equal to the equivalent of 5% of the basic fraction deducted from income tax for individuals. natural.
That said weight is not greater than the maximum established by decree of the President of the Republic and that it be referred to as goods for the use of the recipient for non-commercial purposes.
Goods and services with VAT rate 0 in Ecuador
Between the goods and services with VAT rate 0 in Ecuador, We can mention the following so that the reader has a clear knowledge of them and we proceed to determine them as follows:
- Those related to national land and water transport of passengers and cargo and also those of international cargo transport, air cargo transport. Similarly, the transportation of crude oil and gas is included in this group.
- Those of the health type, including those related to prepaid medicine and drug preparation services.
- Those of the rental or leasing type of real estate that are intended solely for the use of housing.
- Public services such as electricity, sewage, water, and garbage collection.
- Those of educational level in all levels.
- Children's nurseries, nursing homes, religious, book printing, funeral services.
- Those of a type administered by the State as well as entities of the public sector and that generate the payment of a price or fee such as Civil Registries, granting of licenses, permits, among others.
- public shows.
- Those of a financial and stock market type provided by entities legally established for that purpose.
- The packages related to receptive tourism and that are invoiced inside or outside the country to people or companies that do not live in Ecuador.
- The toll that is charged according to the use of roads and bridges.
- The systems in charge of the lotteries of the Junta de Beneficencia of the city of Guayaquil and the Fe y Alegría program.
- Those of aero fumigation.
- Those that are made personally by the artisans themselves and that are qualified by the National Artisan Defense Board. Likewise, the services that are provided in the workshops and the operators of produced and commercial goods have a zero rate of VAT.
- Those intended for refrigeration, freezing and cooling processes for the conservation of food goods with a zero VAT rate and, in general, all products that may perish and are exported, as well as those for cutting, grinding and extraction through of chemical and mechanical means in order to produce edible oils.
- Insurance and reinsurance related to health and individual or group life, medical assistance and personal accidents; and also land traffic accidents.
- Those that are provided in social places such as clubs, professional associations, unions, production chambers and the like that generate charges to members, fees or canons that do not exceed 1.500 dollars a year. They will be associated with paying VAT at a rate of 14%.
Conclusion
As we can see, there are a number of goods and services that are exempt from VAT cancellation and another number of goods that are and are also defined as 0 rates.
Thus we have been able to determine a list of benefits and services that the reader will be able to identify at the time they need to know if they cancel or not the so-called Value Added Tax, commonly known as (VAT). In the same way, it is specified what is meant by the Value Added Tax (VAT).
We hope that this article has been able to make this issue clear to the reader, which is quite important when it comes to being informed of the due taxes that are generated from the different items such as food, medicines, among other specifications that the reader can determine in the list of products that we have mentioned throughout the article that we have developed.
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