Tax Types in Ecuador: Accounting Guide 2024

Taxes in Ecuador play a fundamental role in the functioning and development of the country. These mandatory financial contributions have various purposes that directly impact society and the economy. In this article we are going to review the types of taxes that apply in Ecuador, who are the entities responsible for collecting them, the compliance dates and if they are taxes for individuals or are taxes for companies and businesses. Among the main taxes in Ecuador, we can find the Value Added Tax (VAT), the Income Tax (IR), the Foreign Exchange Tax (ISD), the Consumer Tax Specials (ICE) and motor vehicle tax. Automate your company's accounting in minutes with Mobilvendor. Get to know everything hereAccounting automation systemTaxes in EcuadorContents hide 1 National Taxes2 Municipal Taxes3 Types of taxes paid by individuals 4 Taxes paid by companies in Ecuador5 Calendar and dates of payment of taxes in Ecuador6 RecommendationNational TaxesIncome Tax (IR) :Description: Taxes income generated by individuals and legal entities. Collecting entity: Internal Revenue Service (SRI) .Value Added Tax (VAT) :Description: Taxes the value added on each stage of the production and distribution chain.Collecting entity: Internal Revenue Service (SRI) .Special Consumption Tax (ICE) :Description: Taxes goods and services considered as luxuries or with environmental impact.Collecting entity: Internal Revenue Service (SRI) .Foreign Exchange Tax (ISD) :Description: Taxes transactions involving the outflow of foreign currency from the country.Collecting entity: Internal Revenue Service (SRI) .Capital Exit Tax (ISC) :Description: Taxes the outflow of capital abroad. Collector: Internal Revenue Service (SRI) .Inheritance and Gift Tax:Description: Taxes inheritances and donations of assets and rights.Collecting entity: Internal Revenue Service (SRI) .Municipal TaxesIn Ecuador, municipal Decentralized Autonomous Governments (GADs) also collect local taxes to finance their functions and services. Here is a list of some municipal taxes with brief descriptions:Urban Property Tax:Description: Taxes the ownership of urban real estate, such as housing, commercial premises and land in urban areas.Collecting entity: Decentralized Municipal Autonomous Governments:Rural Property Tax:Description: Taxes the ownership of rural real estate, such as agricultural land and estates. Collecting entity: Decentralized Autonomous Municipal Governments.Administrative Services Fee:Description: Tax administrative services provided by the municipality, such as the issuance of permits and licenses.Collecting entity: Decentralized Municipal Autonomous Governments.Garbage Collection Fee:Description: Taxes the garbage collection service.Collecting entity: Decentralized Municipal Autonomous Governments.Special Contribution for Improvements:Description: Taxes property owners who directly benefit from public works such as paving, sewerage, etc.Collecting entity: Decentralized Municipal Autonomous Governments.Tax on Outdoor Visual Advertising:Description: Taxes outdoor visual advertising, such as billboards and posters. Collecting entity: Decentralized Municipal Autonomous Governments.Municipal Patent:Description: Taxes the carrying out of economic activities within the municipal area.Collecting entity: Decentralized Municipal Autonomous Governments.Types of taxes paid by natural persons.In Ecuador, natural persons are subject to various taxes, both nationally and locally. Here is a list of taxes paid by individuals in Ecuador:Income Tax (IR) :Description: Taxes income generated by individuals, whether for dependent work, independent work, investments or other sources of income. Value Added Tax (VAT) :Description: Taxes value added in the acquisition of goods and services. Natural persons pay it when they consume goods or services taxed with VAT.Foreign Exchange Tax (ISD) :Description: Taxes transactions involving the outflow of foreign currency from the country. It may affect individuals who carry out certain types of international transactions.Inheritance and Gift Tax:Description: Taxes inheritances and donations of assets and rights received by individuals. Special Improvement Contribution: Description: Tax on property owners who directly benefit from public works financed by the municipality. Urban and Rural Property Tax:Description: Taxes the ownership of urban and rural real estate, respectively.Special Consumption Tax (ICE): Description: Although it is mainly a tax affecting consumer goods, sometimes individuals may be affected when purchasing products subject to this tax.Administrative Services Fee:Description: Some municipalities charge fees for administrative services, such as the issuance of permits and licenses.Taxes paid by companies in EcuadorIncome Tax (IR) :Description: Taxes income generated by companies, whether for commercial, industrial, agricultural activities, among others. Value Added Tax ( VAT) :Description: Taxes added value in the sale of goods and provision of services. Companies act as agents for withholding and collecting VAT in their transactions.Foreign Exchange Tax (ISD) :Description: Taxes transactions involving the outflow of foreign currency from the country. It may affect companies that carry out international transactions.Special Consumption Tax (ICE) :Description: Taxes the production and sale of goods considered to be luxuries or to have an environmental impact. Some products subject to this tax are alcoholic beverages, tobacco, luxury vehicles, and others. Deferred Income Tax (Deferred IR) :Description: Applies to companies that register temporary differences between financial and tax accounting. It is a tax that is paid in the future.Foreign Asset Tax:Description: Taxes the assets that Ecuadorian companies own abroad.Special Improvement Contribution:Description: Taxes on companies that directly benefit from public works financed by the municipality. Capital Exit Tax (ISC) :Description: Taxes the outflow of capital abroad.Municipal Patent:Description: Taxes the carrying out of economic activities within the municipal level.Schedule and dates of payment of taxes in EcuadorThe The tax schedule in Ecuador is governed by the rules of the Internal Revenue Service or the person responsible for collecting taxes. Here is a list of the types of taxes and their payment dates:Income Tax (IR) :Individuals must generally file their annual income tax return between the months of March and April.Companies must file their annual income tax return in the month of March.Value Added Tax (VAT) :VAT is generally paid monthly, with due dates at the beginning of the month following the tax period.Special Consumption Tax (ICE) :ICE payment dates can vary depending on the type of encumbered asset or service. They can be monthly or in specific periods. Foreign Exchange Tax (ISD): ISD payment dates may also vary depending on the nature of the transaction. It is usually paid at the time of making the transaction involving the outflow of currency.Municipal Taxes: The payment dates for municipal taxes, such as property tax and the municipal patent, may vary by municipality. They are usually established annually and are reported to taxpayers. 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