Ecuador

Resident entities are taxed on their worldwide income. Non-resident entities are subject to tax on Ecuadorian-source income only.

International Financial Reporting Standards (IFRS) are in force for all entities. Local tax authorities have established that for CIT purposes, and corresponding pre-payments, companies are obligated to follow these accounting principles.

Taxes on corporate income are levied at the following rates:

Ecuadorian companies owned by residents or non-residents located in non-tax-haven jurisdictions are subject to a 22% or 25% CIT rate. The general CIT rate is 25%; however, a 28% rate should apply if non-resident shareholders are located in a tax haven jurisdiction and additionally there is an Ecuadorian individual shareholder in the ownership structure. Such increase is also applicable when the company's ownership structure is not duly disclosed before the Ecuadorian tax authorities.

A reduced CIT rate from 3% to 5% benefit exists for new investments to the extent some conditions are met.

See the Branch income section for a list of countries and territories considered as tax havens by the tax authorities.

Single Income Tax on sports betting operators (Impuesto a la Renta Único a los Operadores de Pronósticos Deportivos)

On June 2023, a new tax regime was created for sports resident and non resident bet operators. Overall, a 15% CIT rate was established for these activities in effect as from July 2024. Below some topics to be aware of:

• Residents and non residents operators must be registered before the Tax authority
• The taxable income for residents and non residents sports bet operators is the total income including commissions minus the total of the prizes paid, provided that withholding has been made at the time of payment of the prize to the customer.
• Several sanctions are established for the lack of compliance of formal obligations.

Local income taxes

No local or provincial government taxes on income are imposed on companies.