Social security contributions
Social security contributions must be paid to the Ecuadorian Social Security System. There are two different rates, according to the individuals' employment relationship.
Private employees under a labour relationship will contribute at the rate of 9.45% of remuneration arising from employment (except certain statutory social benefits received). Special rates apply to employees working on special sectors of the economy. Voluntary contributors must pay a rate of 17.6% over their income.
The employer contribution amounts to 12.15% of total remuneration.
Value-added tax (VAT)
No VAT applies on employment services under a labour relationship. Personal services provided under a professional fee contract relationship are subject to VAT at 12%, which, when provided to companies, is subject to 100% withholding by them.
Professionals are required to file VAT returns.
See the Other taxes section in the Corporate tax summary for more information.
Remittance tax (Impuesto a la Salida de Divisas)
Remittance tax of 5% is imposed on the transfer of money abroad in cash or through cheques, transfers, or courier of any nature carried out with or without the mediation of the Ecuadorian financial system, included transfer from foreign bank accounts. Dividends are exempt from this tax, under certain considerations.
As of January 2022, the remittance tax rate will be reduced progressively from 5% to 4% by a quarter of a percentage point (0.25) on a quarterly basis, as follows:
- First reduction: January 1st, 2022 → 4,75%
- Second reduction: April 1st, 2022 → 4,50%
- Third reduction: July 1st, 2022 → 4,25%
- Fourth reduction: October 1st, 2022 → 4%
Municipal asset tax
The municipal asset tax is levied on all individuals and companies required to keep accounting records in accordance with Ecuadorian tax legislation. This tax is levied annually at a rate of 1.5 per thousand (or 0.15%) of total assets less current and contingent liabilities, as shown on the balance sheet.
Municipal real estate tax
The city governments assess an annual municipal property tax, which ranges between 0.25 per thousand and 5 per thousand (0.025% to 0.5%) of the commercial value of the property, as determined by valuation carried out by the city government, for both urban and rural properties (rural property is taxed at a maximum of 0.3%).
Municipal tax on capital gain in the transfer of real estate (Plusvalía)
10% real estate transfer tax applies to the transfer of urban real estate property.