Metropolitan Ordinance No. 086-2024: Key Points and Challenges for Taxpayers

On December 26, 2024, the Metropolitan Council of Quito issued Metropolitan Ordinance No. 086-2024, which introduces substantial changes to the regulation of the Patent Tax and the 1.5 per mille Tax on Total Assets, both of which directly affect the exercise of economic activities within the Metropolitan District of Quito.

The fact to generate the patent tax is the permanent conduction of economic activities, understood as those carried out for 183 days or more within a single fiscal year.

A key aspect of this ordinance is the differentiation between taxpayers who are required to maintain accounting records and those who are not:

• Not required to maintain accounting records: They will pay a fixed annual fee of USD 15.00 per RUC under a simplified scheme. Self-employed workers will pay the minimum fee established in the COOTAD.
• Required to maintain accounting records: The tax is calculated on the net equity of the previous fiscal year, applying progressive rates between 1% and 2% on the excess fraction. In no case shall the tax be less than USD 10.00 or exceed USD 25,000.00.

The ordinance also provides benefits, such as a 50% reduction of the tax for those reporting losses and a one-third deduction when there is a decrease of more than 50% in profits compared to the average of the previous three fiscal years.

Regarding the 1.5 per mille Tax on Total Assets, this applies exclusively to taxpayers required to maintain accounting records and is calculated based on the total assets of the previous year, with deductions established by law. Several exemptions are provided, including for non-profit foundations, charitable entities, and agricultural activities.

The accomplishment of these tax obligations requires precise technical knowledge, as deadlines for filing, determination of taxable bases, and application of benefits can significantly impact the fiscal burden of both companies and individuals.

At Quevedo & Ponce, we provide specialized advisory services in tax and municipal law, assisting our clients with the analysis of regulations, optimization of tax obligations, and prevention of legal contingencies. Our team is prepared to support you in the practical application of this ordinance and in the effective fulfillment of all your obligations.