AFAIK (not a licensed lawyer in EC and won't be licensed here for at least a few more months)...
General Overview
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Ecuador鈥檚 tax agency is the Servicio de Rentas Internas (SRI). All taxes are derived from the C贸digo Tributario and the Ley de R茅gimen Tributario Interno, which define the principles, rates, and exemptions.
Main Categories of Taxes
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Impuesto a la Renta / Income tax
***Residents (staying 183 days or more in a tax year) are taxed on worldwide income***
Non-residents pay tax only on Ecuadorian income (e.g. local employment, rental, or investment income).
Rates for individuals currently range from 0% to 37% depending on annual income after deductions.
Residents can deduct personal expenses (housing, health, education, food, and clothing) up to a capped limit (updated annually by the SRI).
Taxes on Investments
Investment income (interest, dividends, capital gains) taxed as follows:
Dividends from Ecuadorian companies are generally subject to 10% withholding.
Capital gains from real estate have a 10% tax on profits and plusval铆a (municipal).
***Foreign-source investment income is taxable for residents.***
IVA (Impuesto al Valor Agregado) / Sales tax (VAT)
It applies to most goods and services at 15% (raised from 12% in 2024). Certain essentials (basic food basket, education, and health services) are untaxed.
Impuesto a la Salida de Divisas (ISD)聽 / Currency exit tax
A 5% tax on money transferred abroad.
Municipal Taxes
Local taxes on real estate, vehicles, business licenses, etc.
Dep贸sitos a Plazo Fijo / CDs
As of 2021, interest on CDs held over 180 days is untaxed (used to be 360)
Who Must File and When
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- Individuals must file annual income tax returns in March if income exceeds SRI thresholds (~$12k in 2025). Exact day depends on 9th digit of cedula. Aside: This likely means over 90% of individuals in Ecuador aren't required to pay income tax.
- Companies file corporate returns in April
- Sellers file VAT monthly or semi-annually, depending on business size
- Vehicle taxes are paid yearly when you renew your registration (month depends on last digit of plate)
- Property taxes are also paid once a year and can include a discount for prompt payment
NOTE: Foreign pensions and certain remittances may be exempt if the funds come from taxed income abroad AND are not considered Ecuadorian-sourced. Ecuador doesn't have a double taxation treaty with the USA and U.S. citizens must file taxes in both countries (if meeting reporting threshholds). However, tax credits may offset double taxation under U.S. law.
Tax Benefits for Seniors (65 and up)
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- IVA (Sales Tax) refunds of up to 50% paid on personal purchases of goods and services, up to a monthly cap (around $140 in 2025). Applies only to registered 鈥渁dultos mayores.鈥�
- Exemptions or reductions (often 50%) on property tax, waste collection, and water/sewer fees. Varies by Municipality and MAY NOT APPLY IN SOME MUNICIPALITIES
- Partial or total exemption for transfers abroad related to health or family expenses, if documented
- 50% discount on notary and registry fees
- 50% discount on interprovincial transport, cinema, utilities (electricity, water)
To claim income tax or IVA refunds, seniors must register as an 鈥渁dulto mayor鈥� at the SRI. The IVA refund is processed monthly or quarterly (automatically if purchases are made with a senior-registered ID number). Refunds are deposited into the person鈥檚 Ecuadorian bank account within about 60 days.
