Ecuador

Corporate residence is determined by the place of incorporation. For foreign branches, it is the place stated in the domiciliary deed.

Permanent establishment (PE)

According to the local tax legislation, a company can be deemed to have a PE in Ecuador if it maintains any place or fixed centre, within the country, in which a foreign company develops all or part of its activities.

The corresponding regulations point out that a PE also exists when a foreign company maintains, within the country, a person or an entity that acts on its behalf and habitually exercises an economic activity. It contemplates several instances where this is applicable, among them:

• A person with legal representation, which is normally granted through a power of attorney or through a legalised decision by the company and includes the capacity to legally act on behalf of the company.
• A person working under a contractual relationship for a foreign company to carry out economic activities on behalf of that company.
• A centre for the direction of the activities of the foreign company.
• A branch, agency, or office that acts on behalf of the foreign company.
• An office for the provision of technical consultancy services related to contracts that are executed in the country.

Single Income Tax on Sports Betting Operators (Impuesto a la Renta Único a los Operadores de Pronósticos Deportivos)

The taxpayer of this tax are individuals and/or companies that operate sports forecasts and, as substitutes, the individuals or companies that make use of the sports forecasting platform when the operator is not a tax resident in Ecuador or does not have a permanent establishment in Ecuador. Income tax is levied on Ecuadorian source income received from live or internet sports betting activities

For the calculation and payment of the tax, the following parameters must be considered:

The taxable income of Resident taxpayers is the total income including commissions minus the total of the awards paid, provided that withholding has been made at the time of payment of the prize.

The taxable base of non-resident taxpayers is the total amount paid by the user in each transaction.

The winners of the betting games will pay as single 15% tax on the value of each prize received in cash or in kind by the sports betting operators, who must act as withholding agents of this tax.

The tax rate is 15%.

The tax shall be filed on a monthly basis.