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Writer's pictureBeatriz Meythaler

Successful Defense of Tax Deduction Rights in the Pharmaceutical Sector

In the pharmaceutical sector, a prominent client in the field of drug distribution faced a significant challenge with the Internal Revenue Service (SRI). This case involved the dispute over the deductibility of marketing expenses related to the training of doctors and medical representatives, which are crucial for the promotion of pharmaceutical products.


The amount in dispute amounted to more than one million five hundred thirty thousand dollars (USD 1,530,000), a sum that reflects not only the financial importance of the case but also its impact on the country’s tax jurisprudence.


Background

The SRI issued Resolution No. 117012012RREC021800, which upheld a determination report denying the deduction of expenses incurred by the company in the 2008 fiscal year. This situation not only affected the client’s finances but also raised serious concerns about the common practices in the industry.


Importance of the Case

The significance of this case lies in the fact that the National Court of Justice, in previous decisions, had reaffirmed the right of pharmaceutical companies to consider expenses related to the training of healthcare professionals as deductible. This principle not only ensures the economic viability of companies in the sector but also promotes responsible and educational practices in the medical field.

 

Case Development

Meythaler & Zambrano acted as the lead advisor in this case, managing the legal strategy and defending the client’s interests with a team led by Dr. José Rafael Meythaler and attorney Gabriel Pinto Navarrete. Thanks to their expertise in tax litigation, a resolution was achieved that strengthens legal certainty for pharmaceutical companies in Ecuador.

  1. The process began on August 27, 2012, and extended until September 30, 2024. Throughout this period, several judicial instances took place, culminating in a favorable ruling.

  2. On September 30, 2024, the National Court of Justice decided not to accept the appeal presented by the SRI, thereby reaffirming the validity of training expenses as deductible. The original ruling from the District Court of Tax Litigation, issued on May 28, 2021, was upheld, ensuring the protection of our client’s interests.

 

Conclusion

This case not only highlights our firm’s ability to handle complex litigation in the tax sector but also reaffirms our commitment to defending our clients’ rights. Through our experience and dedication, we will continue to support pharmaceutical companies so they can operate with confidence and certainty in a constantly changing legal environment.


If your company faces similar challenges, contact us. At Meythaler & Zambrano, our team of lawyers is ready to offer the solutions you need.




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Legal disclaimer

The content of this blog is provided for informational and educational purposes only and should not be considered legal advice. Regulations in Ecuador are subject to changes and updates that may affect the applicability and accuracy of the content published here. We do not guarantee that the information presented is accurate, complete or current at the time of reading. Therefore, past postings should not be construed as necessarily reflecting current regulations. We strongly recommend that you consult with our qualified attorneys for specific and personalized advice.

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