Ecuador

Corporate - Significant developments

Last reviewed - 02 July 2021

On 31 December 2019, the Ecuadorian government introduced the Law for Tax Simplification and Progressivity. The main corporate tax measures and reforms include (Regulations were enacted in August 04,2020):

  • Taxation on the distribution of dividends.
  • Reforms of corporate income tax (CIT) pre-payments.
  • New thin capitalisation rules for inter-company loans.
  • Reforms on transactions exempted from remittance tax.
  • Introduction of a new temporary contribution.
  • Value-added tax (VAT) on the importation of digital services.

Due to COVID-19 and the current economic situation, in June 2020 the Ecuadorian government enacted the Law of Humanitarian Support to Combat the Health Crisis derived from COVID-19 (Regulations were enacted in October 05,2020). This Law introduces, among others, the negotiation of working conditions between employers and employees, new hiring conditions, as well as the possibility to reduce working hours per day, without major changes in tax legislation.

Publications about additional economic and regulatory measures related to COVID-19 are available at: https://www.pwc.ec