Declare and comply with the payment of taxes is one of the obligations that every taxpayer must assume. For this, there are various tools, including the SRI Form 107. Which is a proof of the Income Tax withholding statement.
We invite you to continue reading and find out about many important aspects about this procedure. This time we will be explaining the procedure for filling out the form, its usefulness, how to access it and which is the body in charge of supervising said process.
Stay in this article and you will discover everything you need to know about SRI Form 107!
Completion of SRI Form 107
To complete the SRI Form 107, It is necessary to fill in a series of mandatory fields. This time we will give you the instructions on how to fill out your withholding form for income tax.
In the first place, the initial boxes of the format are: the fiscal year, where the year in which the income that is taken into account in withholding appears is recorded. And the delivery date, where you must enter the day, month and year in which the proof form will be presented.
Next, you will find the employer’s identification, where both the Unique Taxpayer Registry (RUC) and the names and surnames (or the Company Name, as the case may be) are placed. Subsequently, the data of the contributing employee is requested, that is, the number of the national identification document or the passport and the names and surnames.
Once these data have been entered, the following is the calculation of the tax settlement. To do this, it is necessary to complete several boxes, as indicated below:
Positive (+) values for the calculation:
- Wages and salaries: In this first box the total value corresponding to the monthly remuneration that the worker has for exercising his labor obligations is placed.
- Bonuses, commissions, bonuses and other taxed income: This section refers to the set of remunerations that are part of the salary payment, and that have not been invoiced.
- Profit sharing: here you must enter the amount corresponding to the profits received by the worker at the end of his work year.
- Taxed Income Generated With Other Employers: This field is completed only in the case that the worker has already had a dependent employment relationship with another employer, in the year in which the withholding is being recorded.
If this is not the case, then a value of zero (0) can be assumed.
- Tax assumed by the employer: In this box, enter the value of the income tax that the employer who makes the declaration accepts as valid. When workers maintain a net income contract with him.
Dependency income that does not constitute taxed income: This category includes those amounts that, although they are income of the employee, these are not counted for the calculation of the withholding tax. Therefore, they are placed only as information data.
Here both the reserve amounts and the salaries of the first two (2) months of the year following the one being declared are taken into account. Also, compensatory bonuses are considered to raise the salary and expenses associated with travel expenses (food, lodging, transportation, clothing, among others).
Negative (-) values for the calculation:
- Personal contributions to the IESS with this or another employer: here the values discounted to the worker for payment to the Ecuadorian Social Security Institute (IESS) are reflected. Except for those that have been assumed by the employer.
- Deductions for personal expenses: This section includes all the expenses that the worker projects in the basic nonsense. Such as: food, housing, health, education and clothing.
There is a box for each of them, enter the corresponding value, separately.
- Disability waiver: This assumes the value equivalent to three (3) times the basic fraction exempt from the payment of Tax that is valid for the date of registration.
Applies to people whose disability is greater than 30% and has been verified by CONADIS.
- Exemption for the elderly: corresponds to two (2) times the referential value of the basic fraction. It is only valid for persons over sixty-five (65) years of age.
How is the Income Tax calculated?
In order to calculate the tax, it is necessary, first of all, to make the algebraic sum of each of the items mentioned above. As you can see, each item has an associated sign, positive (+) and negative (-). To do the addition, you must respect each item its respective sign.
That is, when you go to do the summation, you must give each one its sign, and at the end of the count, this value must give a positive number, greater than or equal to zero (0). This value that you obtain will correspond to the taxable income.
Next, to obtain the tax itself, it is necessary that a percentage be applied to that taxable base. This will be the rate indicated in Article # 36 of the Organic Law of Internal Tax Regime. There you must check the percentage value (%) that corresponds to the range in which the basic fraction is found, and apply it to the tax base.
To complete the completion of the form, it is required that it be signed by both the employer or its Legal Representative, as well as by the contributing worker. And also, add the RUC and signature of the person who handles the company’s accounting.
What must the SRI Form 107 Contain?
This form must record the pertinent information to identify the withholding agent and the worker for whom the tax is calculated. Likewise, it is necessary to specify the fiscal year and the delivery date of the document. In addition, it summarizes the items related to the tax settlement, such as:
- Income
- Personal deductions
- Contributions to the IESS.
In this way, it is possible to calculate the tax base and the Income Tax caused. Making the respective weighting with the rate of the basic fraction. Finally, it contains the signatures of the Legal Representative or Withholding Agent, the worker involved and the person responsible for accounting.
Consultation of SRI Form 107
To access the SRI Form 107, you must enter the web portal of the Internal Revenue Service. In this link that we leave at your disposal, just by giving click here, You can go to the official website of the agency.
When you are inside the page, press the button «SRI online«, Which is located in the center of the screen. By doing so, you will have been directed to a section where you can make any type of consultation or management on different topics covered by this organization.
Go to the left side of the screen and drop down the box for «Declarations«. Here you will see several options, including the tax return. Press this button and the box will be displayed again, showing the third option Form 107-REDP.
Then, you will find the window to enter with your username (identification: passport, ID or RUC), the username of an additional person that you have authorized (placing their ID) and the established password. When you log in, you will be able to access the form and fill in all the required fields that are presented to you.
What is it for?
This procedure has the purpose of allowing natural or legal persons to generate an Income Tax declaration. As long as it is a dependent employment relationship in a company. In this way, it is possible to present to the body in charge of the tax administration, proof of the withholdings for a fiscal year.
Internal Revenue Service (SRI)
It is a public body in Ecuador, and its main function is to be in charge of the administration of taxes. It not only manages them It also collects them, therefore, this institution has a large database of taxpayers.
In the functional framework of the entity, are the execution of tax policies and the imposition of sanctions for non-compliance with the payment of taxes. In addition, it projects the regulations on tax matters and informs taxpayers about their obligations to the State.
What is SRI Form 107?
The SRI Form 107 constitutes an affidavit of the value of the income tax of a worker. And this employee has to maintain a contract with the organization to which he provides his services, with a dependency relationship.
Therefore, the form is nothing more than a proof of withholdings from the source of Income Tax, for income from work in a dependency relationship. And it must be delivered to the worker even if their income is below the value of the basic fraction stipulated in article # 36 of the LORTI.
As you have come this far, now you know many important aspects about this procedure. We invite you to use this form to file your company’s Income Tax declaration, if you are the employer. Or from the organization you work for, if you are an employee.
Considerations
When a worker ends his employment relationship with an employer and starts it with a new one, it is necessary to present the Form 107 that was granted to the latter. So that you can calculate your withholdings in the remaining time of that year.
The form does not have an associated cost, since it can be filled out online through the aforementioned portal. This is available directly and permanently enabled twenty-four (24) hours a day, seven (7) days a week.
Complete your SRI Form 107!
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