By: Atty. Gabriel Pinto Navarrete
Head of Tax Department
On March 12, 2024, in the Official Gazette Supplement No. 516, the Organic Law to Address Internal Armed Conflict, Social and Economic Crisis was published, making reforms to the Value Added Tax (VAT) rate in Ecuador.
These reforms introduce a variable VAT rate, with the following details:
Rate Increase
A new tax structure for VAT is established, with ranges varying from:
A minimum of 13%.
A maximum of 15%.
The decision to adjust the rate within these ranges falls to the President of the Republic of Ecuador, who, with the favorable opinion of the public finance governing body, may increase or decrease the VAT rate as deemed necessary.
Applicability
Starting from April 1, 2024, the 15% VAT rate will be applicable to all transfers of ownership or the importation of tangible personal goods, covering all stages of commercialization. Additionally, this rate will apply to copyright, industrial property rights, and related rights, as well as the value of services provided.
Conclusion
For those looking to navigate this new fiscal landscape, it is important to seek specialized legal advice that can provide precise guidance and strategies for proper tax planning during this period of changes.
For more information on how these changes could affect your tax obligations or strategies, do not hesitate to contact us. Our team of experts is ready to assist you with personalized advice and tailored solutions.
