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ECUADOR - NEW (IVA 12%) TAXATION LAW ! ITS BENEFITS FOR INCOMING TOURISM. APPLICABLE TO FOREIGN TOUR OPERATORS; FOREIGN OUTGOING AGENCIES AND FOREIGN TOURISTS, WITH EXAMPLES FOR EASY UNDERSTANDING !
Tourism is an INDUSTRY and the export of it is constituted by the Service Providers, namely Local Tour Operators, Agencies or individuals and also by the Hotels, Hostals, Resorts, Lodges providing shelter and/or food.
This reformed law applicable to Incoming Tourism, and currently enforced,Title II-TAX TO ADDED VALUE - CHAPTER I ART. 56 IVA ON SERVICES RENDERED 14. a) and b) & 15. published in the OFFICIAL REGISTRY OF ECUADORIAN LAWS #351 dated December 29th 2010, applies to Foreign Tour Operators, Foreign Agencies and Foreign Tourists, that have an operating branch in Ecuador, (representing the foreign Operator or Agency that already exists, outside our country.) The law also applies to Foreign operators/agencies that utilize a local agency or operator as an intermediary, they will be required to pay a 12% IVA tax, since business and money is being done inside Ecuador and it becomes a local transaction, plus the intermediary's own commision totaling two comissions to the foreign tourist to pay.-
ANY LAW cannot be fractioned when exposed, if the theme and sequence are the same, which only stands to reason so as to prevent manipulation of the referred law, including Only what may be of benefit and excluding any part of it which may be negative, that is why we transcribe and translate both articles.
This new law will APPLY to you as a Foreign Tour Operator or Agency if certain conditions and criteria are fully met and observed. Article 14 is the legal support for following Article 15; thus, if fully complied YOU will not have to pay the 12% IVA tax.
Article 14:
a) The service provider should be a legal resident of Ecuador
b) The Payee or Beneficiary should NOT be a Resident of Ecuador
c) That the expenses or utilization of the income belonging to the Receiver or Beneficiary’s, must be in a foreign country, even if the services rendered are in Ecuador ("pais" in the original).
Article 15:
Bundled packs of INCOMING Tourism invoiced inside or outside of Ecuador (pais in the original text) to individuals or Societies
NOT RESIDENT IN ECUADOR.
:
Two examples would be as follows:
1.- If a foreign agency, operator or even individuals, decide to handle all their reservations directly, with the service provider, i.e. hotels, yachts, resorts etc… they are exempt from paying the 12% IVA TAX and the Tour Operator abroad will receive his full commission, avoiding the local third party commission as well.
2.- On the other hand, if a foreign agency, operator or provider chooses to handle their business through a branch of their own company or ANY other third party, established in Ecuador, they are not exempt and must pay the 12% tax plus the costs, taxes etc of that ecuadorian branch and any commission charged by the third party.
By dealing directly with the hotel, resort, hostal etc of your choice, you also reduce the commission rate, because it will not be necessary to make a split of say (as an example) 50% each between the foreign tour operator and a local tour operator or travel agency; had you used a third party inside of Ecuador; so as not to inflate even more the cost for the consumer. The same applies, if you were to make your reservations, via Arasha/All Of Ecuador to another hotel, resort, lodge or similar if we were a profit-making operator.
Arasha Cia Ltda, Eximius Journeys and its Registered trade name "All of Ecuador" are members of the same GROUP, legally independent enterprises, they work together in the same premises and will provide all the services of a tour operator and the beneficiaries (Ecuadorian Hotels, Resorts, Lodges and similar) will be transfered to you, as a foreign Tour Operator; then, the New LAW will apply, you will get your full comission, sharing nothing and will not have to pay the 12% IVA tax. Article 15 is self explanatory, pointing exclusively to Tourism Packages (Paquetes Turísticos in Spanish), also applied if party involved IS NOT A RESIDENT OF ECUADOR and there are no transactions within the country's territory.
Now, you can enjoy from 98 passenger yachts in Galapagos to 12 passenger smaller crafts plus any other lodging of any category anywhere in the country. Arasha can attend now 120 pasengers at 2 persons per room with cots for families.
Even though Galapagos requires no longer 6 or more months advance payment due to the worldwide drop in tourism of which we are all aware, so you can book maybe 3 months earlier to choose a better yacht, cabins and at lower rates. Payments can be done directly to the facility or via Arasha/All of Ecuador when we will transfer the amount and instruct to whom the invoice should be made. (Either you as the Foreign Tour Operator or the client himself if you have previously so arranged and prefer)
Consequently, Eximius Journeys, owner of "All of EcuadorTM" functions now as a Non-Profit organization, making this a
great benefit overall to both, the Foreign tourism agencies and Tour Operators, because they get their full commission (they don’t have to end up loosing a part (IF COMMISSION IS SHARED) because they used a third party, but, even more important, is the fact that this largely contributes to the cost of your customer being reduced by not adding one extra commission and the 12% IVA tax. If you need any further explanations or make clearer a stated concept, do not hesitate and please e-mail us or give us a phone call.
Hotel, Resort, Lodge and yacht owners are glad to learn they will have to pay only one commission (Yours,the foreign Tour Operator) and will NOT have to charge the 12% IVA tax. You don't need to go to "All of Ecuador" if you wish, Arasha will do it for you if you prefer so.
Otherwise, charging both items increments sensibly the total cost to your client which reflects obviously in lower sales. This is the reason why All of Ecuador, assists Arasha in the logistics, and is a Non-Profit Organization and is a member of the same group. The tax must be paid by the hotel or similar or the tour operator when they become the Local third party, as they turn to be participants of an internal transaction between two Ecuadorian companies, societies or any other form of legal existence established in our country, therefore the NEW reformed Law will not apply nor its benefits.
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RETIRE IN ECUADOR !
If you take a minute to visit our FAQ a lot of the reasons will become apparent, that page has been there for 11 years and you will be surprised at what it says. However there is no better opinion like one of the experts, "International Living Magazine" which has printed and online availability, which is the icon of knowledge in the matter, it qualifies Ecuador as the "besto country in the world for retirement, so we are providing you with a link to the Ecuador section of the magazine:
http://internationalliving.com/countries/ecuador/
Here at the resort, which has been awarded 11 consecutive years from 2004 to 2011 we decided to set up 97 lots that surround the resort with houses included from a top designer and manufacturer of moduled homes with the best materials for tropical weather, the houses ranging from 970 sq.feet (two room) to 1,830.00 sq feet (three rooms), built to fit with the resort landscaping and all the facilitis like water, electricity (215 volts) and sewage disposal. If a larger house is desired, they are available but we should be advised.
Aside of this, every homeowner will have a resort card, entitling the house occupants to have discounts at the resort in several areas such as the theatre, restaurant, spa, 18 hole minigolf, music hall and other activities.
We have our own fresh water sand river beach with a lagoon to swim. Of course the village has a very large swimming pool, tempered, and two tennis courts plus all the trekking and hikes to the rainforest which requieres a guide or on your own after getting familiar. All these are within the resort area which originally was a 135 acre plantation with a rainforest reserve.
The roads, lighting and a few items need to be finished but we expect the village will be ready with pricing, financing if needed by May 2012 and each house can be constructed and installed in two weeks. We will send you the pictures and if you want to visit before buying you will have a complementary stay (free room-restaurant and barcharges will be billed) at Arasha Tropical Forest Resort & Spa of two nights and three days between Sunday 1:00 pm check-in to Thursday 11:00 am (you may leave your baggage at the front desk or ask for a stay extension if available) and leave after lunch if you so desire) at no charge.
Quito, the capital city in the highlands takes only 2 hours car drive and you are about at the village mid-ways from any beach when you feel like going to hot weather and the seashore. There is also a well equipped hospital at 8 minutes drive from Arasha to the nearest town named Pedro Vicente Maldonado. Check if you want the links to TripAdvisor and World Travel Awards in London, UK. Send us an e-mail if you are coming to visit, to pick you up at the airport e-mail us date and flight information to: I would like to visit the village
Tour Operators and Agencies will be notified by e-mail with information about the village, because many owners will put their homes for weekly rentals (ask for availability) and the New Tourism law. Please disregard a second notification if it so happens, with our sincere apologies.
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All of Ecuador OWNED BY EXIMIUS JOURNEYS, IS OUR OWN NON PROFIT GUIDE, SERVICE AND ALL TRANSPORTATION NEEDS PROVIDER, OR CHOOSE A TOUR OPERATOR OF YOUR PREFERENCE TO CONTACT ARASHA DIRECTLY IN ORDER TO REDUCE COSTS UP TO 42% .
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This page has been updated with "New Taxation Law " applied to Incoming Tourism in February 2, 2011, and New Village at the Resort. Page active since 2002
s.i.e.u.o Arasha Ltd- Eximius Journeys "All of Ecuador"TM - All Rights Reserved
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