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INTERNATIONAL VAT GUIDE

Last Updated: December 6, 2024

VAT Guide for Businesses with Customers in Ecuador

This guide provides an overview of VAT (Value Added Tax) in Ecuador, covering applicable rates, registration requirements, invoicing rules, compliance obligations, and filing deadlines. It is intended for businesses engaging in transactions within Ecuador or with Ecuadorian customers.

Overview

Ecuador’s VAT system is governed by the Ecuadorian Internal Tax Regime Law. VAT applies to most goods and services supplied within Ecuador, as well as on imports.

Currency

US Dollar (USD)

VAT Number Format

13 digits, based on the taxpayer’s RUC number (e.g., 1234567890123)

Fiscal Representation

Yes, required for non-resident businesses conducting VAT-related activities in Ecuador.

Voluntary Registration

No, registration is mandatory based on activity rather than threshold.

VAT Rates in Ecuador

Rate Rate Type Description
13% Standard Rate Applies to most goods and services

VAT rate was increased temporarily to 15 % for the year 2024 (effective from 1 April 2024)

8% Reduced rate Certain tourism activities that can only be applied on certain dates in the year
5% Reduced rate Transfers of construction materials (effective from March 2024)
0% Zero Rate Applies to specific goods such as basic foodstuffs, medicines, and exports

VAT Registration in Ecuador

Business Type VAT Registration Threshold
Resident Businesses No threshold, mandatory for all companies and individuals carrying out taxable activities
Non-Resident Businesses No threshold; registration required for any taxable activity in Ecuador

VAT Filing and Payment Deadlines

Frequency Filing Deadline Payment Deadline
Monthly  Due between the 10th and the 28th day of the following month (deadlines vary according to the ninth digit of the taxpayer’s VAT number)  Due between the 10th and the 28th day of the following month

Digital Services VAT Information

VAT on Cross-Border Electronically Supplied Services Yes
VAT Rate on Digital Services 13 % ( VAT rate was increased temporarily to 15 % for the year 2024 (effective from 1 April 2024))
Threshold for Registration No threshold; registration required for any taxable activity
VAT on B2B Sales Reverse charge mechanism applies

Note:

VAT registration for non-established businesses is optional if they provide digital services.

Digital Services in Scope

  • Website supply, web-hosting, and maintenance
  • Supply of software and updates
  • Streaming or downloading of music, films and games

Exemption

Access to electronic newspapers and periodicals may be exempt under specific conditions, typically for educational or public interest purposes.

E-invoicing Requirements

E-invoicing is mandatory for all businesses in Ecuador and non-resident businesses, with invoices required to follow the format set by the Ecuadorian tax authorities.

Digital Reporting Requirements

Ecuador mandates digital reporting of VAT-related transactions through its tax administration’s electronic system which is managed by SRI (Servicio de Rentas Internas).

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Disclaimer: This guide is for informational purposes only and may not cover all aspects of Ecuadorian VAT. Consult one of our tax professionals for specific guidance regarding your business.

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