Ecuador - Civil Law
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Ecuador taxes

If you want to set up a company in Ecuador, this will tell you about tax laws for a Compañía Limitada which is the most common company type in Ecuador.

Ecuador taxes corporate income on a worldwide basis. The headline standard rate for offshore income, from our research, and these things do change, is 22%. However foreign-income may be tax exempt if the company demonstrates that the income tax was paid abroad. Taxes are reasonable in Ecuador as the income corporate tax rate is 22%. CIT rate may be 25% if the company is owned by a resident of a considered tax heaven. This ranks Ecuador as 89th overall in terms of corp. taxation rate internationally.

The value added tax (VAT) rate in Ecuador is 12.00%, which ranks Ecuador as 61st when compared to VAT taxation rate internationally. In terms of other taxation, an employer will contribute 11.15% to the equivalent of a social security fund and an employee will contribute 9.45%. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 306hours. Contributing to this is the number of yearly labor tax payments, which is 13 in EC.

Thin capitalization standards are in effect. Thin capitalisation refers to any sort of restrictions on a business and the debt-to-asset ratios. Dividends received by a resident company from profits previously taxed, are exempt of CIT. A dividend is payments of an earnings of the legal entity, voted on by the board, to shareholders. Dividends can be either shares of stock, cash payments, or other property. Capital Gains are taxed as ordinary income. A capital gains tax is levied on the profits that a corporation or natural person realizes when they sell sells a capital asset for a price that is higher than the purchase price.

Interests are not generally subject to withholding tax. This means that payments to non-residents on interests may not be taxed, unless the interest rate exceeds the rate set by the Central Bank. Any excess is subject to 22% withholding tax, unless reduced by a tax treaty. If interests are paid to a resident of a tax haven, the rate increases up to 25%. Dividends are not generally subject to withholding tax. This means that distribution of dividends to non-residents are not usually subject to tax. If recipient is resident of a tax haven, a dividends withholding tax of 10% may apply. Royalties are subject to a withholding tax of 22%, unless rate is reduced under a tax treaty. Royalties paid to residents of a tax haven may be taxed at an increased rate of 25%.
Municipalities levy net wealth taxes for individuals and corporations. There are transfer and real estate taxes. There are inheritance taxes in EC. We are aware of widely used credits for innovation spend that include tax incentives in Ecuador.

The above is not tax or legal advice for your individual circumstances. We are able to to help you to find an expert in Ecuador who can give you an answer. Contact us today. Click the free consultation button above.

It takes approximately 108 hours to file and prepare documents for a Ecuador Civil Law.
The corporate tax is approximately 22% which is 90 in the world.

Owners of a company in Ecuador are not allowed to carry back a loss and may be allowed to carry forward a loss for 5 years.

The vat rate in Ecuador is 12% which ranks 61 in the world.

Patent box
RND credit
Wealth tax
Estate tax
Transfer taxes
Asset taxes
Capital duties
19Tax treaties
22%Offshore Tax
22%Corp rate
-Loss carryback years
108Corporate time
12%VAT rate
22%Capital gains
NoAEOI planned

Read this to learn about incorporating a company in

We can help you form a company in Ecuador. Click the button above for a no-obligation quote. We will provide you with all the necessary documents to open a bank account as well as a registered office in Ecuador, which is required by law.

Ecuador Tax Treaties

CountryTypeDate signed
DTC 1982-12-07
Sierra Leone
DTC 2013-06-27
DTC 1996-12-18
DTC 2011-05-26
DTC 2004-05-04
DTC 1984-05-23
DTC 1989-03-16
DTC 1999-08-26
DTC 1992-07-30
DTC 2013-01-21
South Korea
DTC 2012-10-08
Costa Rica
DTC 2014-10-22
DTC 1983-05-26
DTC 1991-05-20
DTC 2001-06-28
DTC 1992-04-24
DTC 1994-11-28

Country Info

National Flag of
República del Ecuador (spa)
Area Code
South America
Native Languages