Stalking the elusive IVA Refund

Stalking the Elusive IVA Refund

Among many Sasquatch-like mysteries for Cuenca expats is an IVA refund.  Friends whisper about sightings around the campfire but most have never seen one. On top of the dark mystery is some controversy about whether taking a refund is the right thing to do. 

We will briefly explain the disagreement then the real and thrilling truth about IVAs and 3 ways to get them.  

First reveal… what is IVA?

IVA is the Ecuadorian value added tax. It’s usually 12% of the value of most goods and services, collected at the point of sale and documented by a factura (receipt). But keep reading as there is lots more.

Spoiler alert: there is a maximum monthly refund of about $100. 

Spoiler spoiler alert: the good news is that you may file for refunds from 2017 forward, conceivably receiving multiples of a $1200 annual refund.

The right thing to do?

Some people argue that Ecuador is a poor country and needs the money more than the taxpayers do.  Thus, they leave their IVA refund entitlement in the hands of the government.  That is analogous in some ways to letting the U.S. government keep your income tax refund to finance U.S. government activities.  (Does anybody do that?!  If so, that would make another interesting article.)

On the other side of the debate are people who take the refund. Some of them choose to put the money toward a particular cause like a foundation or even a needy individual or family.  And there are some expats who need the money themselves to shore up their monthly budget for essentials.

Our opinion is that it is your choice and nobody else’s opinion matters. There. Debate settled. Moving on.

Instant IVA Refunds are available but very limited

Whereas refund filing generally requires a bit of work for the taxpayer, the SRI recently introduced a process for obtaining a code for use with participating retailers to get an instant exemption of the IVA on their factura for this purchase. This approach does not require an application, saving the government and taxpayers time and effort.  

However, in Cuenca, this is only available at SuperMaxi and no other retailer participants are imminent.  Inquire at SuperMaxi about how to receive your instant IVA refund.

So, since instant refunds are not moving forward quickly, you still need to apply for a refund for most purchases and this is where we can help.

Who qualifies for IVA returns and for which purchases?

Residents over 65 years of age (tercera edad), and in possession of a cedula have the right to claim a refund of IVA on paid purchases for personal (NOT commercial) use, made with a receipt approved by the SRI (factura con datos). 

To receive IVA refunds you must have an active account with a bank or cooperativa. This can be a current or savings account where SRI can electronically deposit your refund. So, get a jump on things and set one up if you do not already have one. Check out the option of opening a high-interest Certificate of Deposit whilst you’re at it.

Cuenca IVA Refund - SRI Categories
Categories of goods & services where IVA refund is applicable [Source: SRI]

IVA refunds are provided for purchases of goods or services that cover a person’s “primary needs” (shown on the SRI website) in the following categories:

  • Clothing
  • Household/living
  • Health
  • Food
  • Education
  • Communication
  • Culture
  • Leisure/sports
  • Transport and mobility

Tip: Set your browser to translate text to English and most of the webpage reads pretty easily.

What is the maximum monthly refund amount?

For 2022 the maximum amount claimable per month is $102.

The SRI allows claims per month going back five years. Here are the maximum monthly refund amounts for previous years:

  • 2021: $96
  • 2020: $96
  • 2019: $94.56
  • 2018: $92.64
  • 2017: $105 from January to May
  • 2017: $90 from June to December

How do you get IVA refunds?

Third-party providers

Third-party providers can help you with all the tasks shown below (soup to nuts) including the Set-Up Tasks and completing the Step-by-Step process. You just provide them with your paper facturas periodically.  At the end of the article, we list some third-party resources who helped us with information for the article. Bonus points for a (polite) comment about where the expression ‘soup to nuts’ comes from.

Facilitators

Or you can hire a facilitator to help you with only the initial Set-up Tasks shown below.  Then you personally follow the Step-by-Step instructions below to file online.

DIY

Or intrepid “DoItYourselfers” (the kids say DIYers) can do all the setup tasks and electronic filing for themselves, bearing in mind that the SRI office and website operate in Spanish. This approach saves on any fees you’d pay for third-party assistance, but is more work.

Set-Up Tasks

  1. Bank account: You need to have an Ecuadorian bank account into which the SRI will deposit your refund. We said that already. But were you paying attention?
  1. Visit in-person: The taxpayer or her/his designated representative visits the SRI in-person to first open an account and obtain a password. The following documents are required:
    • Cedula of the beneficiary
    • Completed Solicitud form which can be downloaded here

During this set-up visit, the applicant will be directed to file the first refund request in hard copy. This is a prerequisite to your first electronic filing. Details on how to file your first refund and forms will be provided at the SRI.

  1. Register on SRI website: You must register on the SRI website and obtain a user account and password because as of May 2021, IVA refunds can only be obtained through an online process for which detailed, Step-by-Step filing/application instructions are included below.
  1. Save paper facturas: This is the only Set-up you must do yourself.

    You’ll need to save all your paper facturas whether you file online yourself or delegate that to a third party.

    If you use a third party, you can periodically email scanned copies of paper facturas or deliver the paper facturas to them.

    You do not need to save or print out copies of electronic facturas you receive via email from retailers because those are automatically captured and shown in your account in the SRI system.

    A soup to nuts provider should perform all the filing steps shown below for you. And their fee is usually about 10% of your total refund.

Depending on how frequently you want to receive a refund, you provide the paper facturas monthly, quarterly, annually or any convenient interval that works for you.  

Step-by-Step instructions for online filing of IVA Returns

Cuenca IVA Refund - SRI Refund Claim Process
  1. Go to the SRI website and log in. If the login does not respond, try another browser.
  2. In the left column click on the icon with $ in a circle with arrow, for Devoluciones (Tax Refund) and then the submenu Devolución de IVA – Adultos Mayores
  3. Click on the box INICIAR PROCESO DE DEVOLUCIÓN and a dialogue panel will pop up with a confirmation of your address. Click on ACEPTAR.
  4. You are now on the page Devolucion por Internet – Adultos Mayores and there are three clickable links for entering information: 2 for facturas and 1 for airline tickets.
  5. Click on Ingresar Facturas Físicas and on the page Facturas Fisicas look at the bottom at the IMPORTANTE section.
  6. Click on Listado de comprobantes and download to save on your desktop this Excel spreadsheet: DevlvaTerceraEdad.
  7. On this spreadsheet enter all invoices that are NOT electronic invoices. You can recognize an electronic invoice because it has a long barcode and a very long Clave de Acceso number on it. When finished Save this document and close it. You might save it with the month/year in the title. Printing it will not work.
  8. Click on the box Choose File and select and open the Excel file you just created. Click then on the blue button Cargar Archivo.
  9. If there is an error you will see a message box that provides in Spanish details of the error for each facture concerned and what needs to be corrected. Make corrections on the spreadsheet. Then upload again.
  10. You will then see at the bottom a summary (Resumen) of the facturas on the uploaded spreadsheet.
  11. Click on the blue button Guardar Archivo and you will return to the page for inputting facturas.
  12. Click on Ingresar Facturas Electrónicas.
  13. On the page Facturas Electronicas select in the drop-down menus the year and month of this return. (same month as used for the facturas fisicas).
  14. Click on the blue button Buscar.
  15. Next, all electronic invoices issued to your cedula number will appear. At the left bottom corner of the page is a white box for selecting the number of facturas per page you wish to see and a box for selecting the page number.
  16. If you want to, you can open any factura by clicking on the red icon but there is no need to do so. In the column Monto IVA you see the amount of IVA included in each invoice. You simply key in this amount in the field for IVA Solicitado. Then in the column Seleccionar click the box for each factura you wish to include in this return. NOTE: do not include non-eligible facturas; for example from a liquor or pet store. You must also use the drop-down menu in the final column to select the category of the purchase.
  17. Click on the blue button Procesar Facturas Selectionadas. Then a summary appears.
  18. Click on the blue button Guardar Seleccion Realizada.
  19. If you have airline tickets to claim, click on Ingresar boletos aeros.
  20. In the drop down menus select the year and month and then enter the ticket number. There are confusing instructions from the SRI. One of them is that you enter the month following the month of purchase and another one is two months. I have personally waited for more than that and kept getting a message that no information on this ticket was available. The SRI told me that it is the airline’s responsibility to report the sales to them and recommended addressing the issue with them. If you go to the SRI with your ticket documentation you can file a manual return request.
  21. Click on the blue button Buscar and select the ticket(s) to be included. Then you will return to the main menu page.
  22. Click on Envio de solicitud.
  23. On the next page is a drop-down menu. Select NO to declare that your return does not contain any facturas issued in Manabi and/or Esmeraldas.
  24. Click on the blue button Cargar Informacion.
  25. On the next page click on the blue button Aceptar.
  26. You will receive an email in your mailbox on the website to acknowledge that your request is being processed and then you will receive the money in your bank account on record. The timing for this is variable. Typically within a month, but longer if the government is short of money.

Handy hint: If a factura covers purchases in more than one of these categories, that factura may only be submitted once and it must be classified in the category with the highest expense item shown on it.

English-speaking third party assistance

Whilst we can’t personally recommend the below providers because we haven’t used their service, they do offer solutions to help claim your IVA.

Jacqui Guerrero from G&G Asesores Tributarios

Jacquie Guerrero is an accountant and the principal at G&G Asesores Tributarios. The firm has a soup to nuts IVA filing service including SRI setup for which it charges 10% of your refund. Jacquie has a lot of expat clients and offers a variety of tax and accounting services. 

Contact Details

Diana Vera

Diana Vera is a well-known, medical and general facilitator who can help you with the SRI Set-Up Tasks for the cost of 1 or 2 hours of her time at $15 per hour.

Contact Details

Final Words

We hope this guide has unlocked the mystery of claiming your VAT refund from the SRI. Perhaps you’re now ready to start claiming your refund or have decided the effort simply isn’t worth it for you. Either way, you have a path forward. If you are thinking about donating your refund to a non-profit, check out our article on volunteering opportunities in Cuenca for some potential worthy causes.

The authors

This article was written and researched primarily by Eric Fraterman with Rick Snyder contributing some context. Eric is much smarter and wiser so his contribution is mostly the Step-By-Step process for expats who want a refund on a DIY basis, without any third-party assistance.  Information was sourced from

  • Real-life SRI electronic filing experience
  • SRI website, and
  • Third party service providers.

View more articles from Rick.

6 Responses

  1. Eric – Maybe you mentioned it and I missed it. IF you buy your groceries at Supermaxi, or Corral, where they sell pet food, paid separately for pet food. Otherwise if they see pet food on receipt, they disallow the entire purchase. At least so I have been told.

  2. The origin of the American English expression of the idiom phrase from soup to nuts is the idea of a full-course complete meal. Humans have been eating dinner for many centuries, including an appetizer, main dish, or entree, then a dessert. Soups are the typical appetizer, while a sweet treat with nuts is the dessert.
    Etymology also suggests that the original idioms were from pottage to cheese and from eggs to apples. From soup to nuts only came to the United States during the 20th century.

  3. I am curious if any of the volunteer organizations that are always looking for donations would file my IVA claims if I simply gifted them the money. Otherwise I would not pursue and IVA refund. If anyone knows all ears here.

    1. I think your best bet for this might be Hogar de Esperanza’s Expat Services. They have some people there that help pay bills for gringos. I think this could be an extension of that. Let me know if you’d like me to make inquiries on your behalf. I’m interested in their response.

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