Extension of the use of labels on products with a VAT rate of 12% until December 31, 2024.
On March 15, 2024, by means of Executive Decree No. 198, the President of the Republic decided to modify the general rate of Value Added Tax – VAT from 13% to 15%, for the year 2024, general rate that will be applicable as from April 1, 2024.
Subsequently, through Ministerial Agreement No. MPCEIP-MPCEIP-2024-0038-A of March 22, 2024, the Minister of Production, Foreign Trade, Investment and Fisheries (“MPCEIP” by its Spanish acronym) provided that, in the event that subsequent modifications are made to the general rate of the Value Added Tax – VAT by the President of the Republic, suppliers, distributors and marketers of industrialized goods and products, may maintain the label previously used until their inventory is exhausted, for a period of up to 180 days.
Considering the current market situation, through Agreement No. MPCEIP-MPCEIP-2024-0074-A, issued on September 16, 2024, the MPCEIP has provided for the extension of the use of labels on products with VAT marked at 12% until exhausting its inventory or until December 31, 2024, whichever occurs first. Likewise, in case of future modifications to the Value Added Tax – VAT rate, suppliers, distributors and marketers of industrialized goods and products may keep the previously used label until exhausting its inventory or its use until December 31, 2024, whichever comes first.
This provision will be mandatory for all those suppliers, distributors and marketers of industrialized goods and products, in accordance with the second paragraph of Article 9 of the Organic Law for Consumer Defense, which states: “All information related to the value of goods and services must include, in addition to the total price, the additional amounts corresponding to taxes and other surcharges, in such a way that the consumer may know the final value”.
The Undersecretariat of Quality of the MPCEIP will monitor compliance with this Ministerial Agreement and may initiate administrative sanctioning procedures in case of detecting non-compliance with this provision.
For more information, please contact us at the following emails:
María Rosa Fabara: mrfabara@bustamantefabara.com
Andrés Becdach: abecdach@bustamantefabara.com
Luis Rivadeneira: lrivadeneira@bustamantefabara.com