Internal Revenue Service - SRI. The SRI has assessed Quiport for the 2013, 2014 and 2015 fiscal years. With respect to the 2013 tax year, on February 24, 2017, the SRI initiated a fiscal review. On February 20, 2018, Xxxxxxx received the Final Determination by the SRI No. 17201824900154057, which concluded that the income tax exemption contemplated in the Free Trade Zone Law - LZF, for free zone users, was not applicable for Quiport and that it should pay approximately US$7.6 million plus interest with respect to the income tax for the 2013. Quiport filed an administrative claim on March 19, 2018 in connection with Final Determination No. 17201824900154057, which was rejected by the IRS on September 10, 2018 through resolution No. 117012018RREC280266. Therefore, Quiport filed a lawsuit before the District Tax Litigation Court - TDCT on December 5, 2018 against the SRI Resolution. On January 9, 2019, the TDCT tribunal admitted the claim. In connection with the 2013 income tax dispute, on March 22, 2018, pursuant to the Concession Agreement, Quiport notified the Municipality and EPMSA that the SRI's Final Determination for the 2013 tax year constitutes a Political Event under the Concession Agreement. In addition, on April 12, 2018, Quiport separately notified the Ecuadorian Government of the existence of a Political Event under the Investment Protection Agreement. On September 19, 2019, TDCT ruled in favor of Xxxxxxx. On October 21, 2019, the SRI filed a cassation appeal before the National Court of Justice (CNJ). On July 6, 2021, in a unanimous ruling, the CNJ rejected the cassation appeal filed by the SRI against the favorable ruling for QUIPORT issued on September 19, 2019 by the TDCT. Therefore, recognized Xxxxxxx’s 100% exemption of income tax during fiscal year 2013. On July 9, 2021, XXX filed a request for an extension of the ruling on the grounds that the CNJ failed to refer to the previous rulings by that same court. On July 28, 2021, the CNJ denied XXX´ request for extension stating that the previous rulings do not constitute mandatory precedents. IRS may file an extraordinary protection action before the Ecuadorian Constitutional Court. Nonetheless, an extraordinary action does not suspend the effects of the CNJ´s ruling. Therefore, the bank guarantee for USD. 1,121,176.26 provided by Xxxxxxx must be returned. Management, in conjunction with its legal advisors, consider an unfavorable ruling, before the Constitutional Court, to be reasonably possible (less than 50% likely to oc...
Internal Revenue Service - SRI. The SRI has assessed Quiport for the 2013, 2014, 2015, 2016 and 2017 fiscal years.
