Ecuador published a law on August 21, making significant tax changes to the country’s income tax (IT), value added tax (VAT), and remittance tax (ISD) rules (Ley Orgánica para el Fomento Productivo, Atracción de Inversiones, Generación de Empleo, y Estabilidad y Equilibrio Fiscal (Ley de Fomento Productivo) in Spanish). The new law includes various tax incentives for certain industries and a tax amnesty.
Except for the tax amnesty and other non-annual liquidation taxes, the changes generally are expected to apply as of January 1, 2019.
Multinationals with Ecuadorian subsidiaries should evaluate how changes to the income tax, value added tax, and remittance tax may affect their operations.
Companies also should consider whether they can take advantage of the tax amnesty.