Ecuador’s double taxation agreements prevent taxes from being applied to commercial transactions that have been taxed in another jurisdiction, representing a financial incentive to foreign companies and individuals considering investing.
Ecuador has double taxation agreements in force with 23 countries around the world, which have bolstered trade and secured greater foreign direct investment.
If you are considering starting a business in Ecuador, or expanding your commercial operation into the Andean nation, you will undoubtedly want to know how Ecuador’s double taxation laws could benefit you.
Ecuador’s double taxation agreements in LatAm
Ecuador is part of the Andean Community (CAN), which also includes Bolivia, Colombia and Peru. In 2004, an agreement to eliminate double income taxation was signed by CAN. Only citizens, residents or companies legally established in any of the member countries can access those benefits.
The most recent of Ecuador’s double taxation agreements to be signed with a Latin American country was with Uruguay in 2013.
Ecuador’s double taxation agreements in Asia
People’s Republic of China
Ecuador signed a double taxation agreement with China in 2015. The agreement includes gains derived from the sale of real estate or movable property, and taxes on the total amount of wages paid by companies.
Almost $6 billion (USD) of goods pass between Ecuador and China each year, according to the World Bank, meaning agreement has been beneficial for many involved in trade between the two.
Japan
Over recent years, trade between Japan and the Andean nation has increased, and Ecuador’s double taxation agreement with the Asian powerhouse was signed and came into force in January 2020.
Within Ecuador, it only eliminated the imposition of income tax when that has been paid in Japan. However, in the case of Japan, it includes:
Income tax
Corporate tax
Special income tax for reconstruction
Local corporation tax
Local taxes on inhabitants
Ecuador’s government has suggested it would like to establish similar agreements with other Asian countries.
Take advantage of business opportunities in Ecuador with the help of local experts
At Biz Latin Hub, our team of legal specialists are equipped to help you take advantage of Ecuador’s double taxation agreements with key markets in Latin America. Through our full suite of multilingual market entry and back-office services, we can ensure the proper expansion of your company.
Our team of professionals offer advice and support to improve your company’s corporate compliance, increase its value and manage its risks.
Reach out to us now to receive personalized assistance focused on resolving your possible conflicts and maximizing benefits.
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La información que aquí se ofrece no debe interpretarse como orientación o asesoramiento formal. Por favor, consulte a un profesional para su situación específica. La información proporcionada tiene únicamente fines informativos y es posible que no recoja todas las leyes, normas y mejores prácticas pertinentes. El panorama normativo está en continua evolución; la información mencionada puede estar obsoleta y/o sufrir cambios. Las interpretaciones presentadas no son oficiales. Algunas secciones se basan en las interpretaciones o puntos de vista de las autoridades pertinentes, pero no podemos garantizar que estas perspectivas se respalden en todos los entornos profesionales.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Legal Team Ecuador
Legal Team Ecuador is the Biz Latin Hub leading experts on doing business in Ecuador The Team writes on the news, doing business, law, and changing regulations. The team are experts in corporate law, Administrative law, Employment law, Immigration law and legal advisory services. Read more about them here. You can contact Legal Team Ecuador via our "contact us page".
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