Ecuador

Corporate - Tax credits and incentives

Last reviewed - 21 July 2022

Foreign tax credit

As of November 2021, foreign tax credit is allowed in Ecuador. Tax credit is equal to the tax paid abroad on the foreign income, up to the amount corresponding to the tax attributable to such income in Ecuador.

Handicapped employee and new employee hiring incentives

An amount equivalent to 150% of remunerations of handicapped can be considered as an additional deduction for income tax calculation purposes. The deduction will apply over the excess of the minimum handicapped employees that the employer is obligated to hire.

Environmental-friendly investments

Additional deductions can be applicable to investments in environmental-friendly assets.

CIT rate's reduction

A reduction of 3 points on the CIT rate is available for new productive investments executed after the Organic Law for economic development and fiscal sustainability after the Covid-19 pandemic up to 15 years; and, a reduction of 5 points in case the taxpayer signs an Investment Agreement with the Government.

Tax credit on remittance tax paid

Remittance tax paid on imports of raw material and goods, included in a list issued by the Tax Policy Board, and used in productive activities can be considered as tax credit for CIT computation purposes.

Other remittance tax exemptions upon payments of capital and interests derived from foreign loans are available under certain conditions.