Taxes in Ecuador

Tax rates in Ecuador in 2026: the short version

Ecuador taxes residents on worldwide income, but much more gently than the 37% top rate suggests: the first $12,208 a year is tax-free, and the personal expense rebate cuts the bill further. What the country has that its neighbours do not is a 5% tax on sending money abroad, charged on both transfers and card payments made overseas.

Ecuador's currency is the US dollar, so all amounts on this page are in dollars with no conversion. You can compare Ecuador with other countries in our taxes by country overview.

Compare taxes in 146 countries: relocation taxes 2026

The tax system

Income earned abroad by individuals who are residents of Ecuador, both local and foreign, is taxable.

Non-residents are taxed on income from Ecuadorian sources regardless of their domicile or place of residence. On income from local sources, non-residents pay income tax at 25%, which is withheld at source.

Main rates

• Personal income tax: 0-37%.
• Corporate income tax: 25%.
• VAT: 15%.

Ecuador's tax authority issues every taxpayer a tax number, and almost all dealings with the state, from returns to residence certificates, go through its portal. The tax year is the calendar year, returns are filed in March of the following year, and tax on salaries and on payments to non-residents is withheld by the payer.

Ecuador tax residency rules: counting days and foreign income

Unlike Panama and Costa Rica, Ecuador taxes residents on worldwide income: the 0-37% scale covers foreign rent and dividends too. You become resident with 183 days in a tax year, or in 12 months spanning two years (Article 4.1 of the Internal Tax Regime Law). The two-year window does not count if you hold another country's residency certificate.

Days are not the only route. Money makes you resident too: if most of your income over the last 12 months came from Ecuador, or your largest assets are here. The Ecuadorian tax office looks at your wallet more closely than at your passport. Tax paid abroad is credited. The calculator below checks both days and economic ties.

Mistakes cost more: the window across two years makes you resident earlier than expected, and after a move to a low-tax country Ecuador keeps you as its resident for four more years unless you spend 183 days there. Murblz support removes these risks: we count days, review income and assets, obtain the residency certificate and apply double tax treaties where they are in force. We guarantee professional work and a transparent process, and in most cases a result on the first filing.

Talk to a manager now

Income tax brackets in 2026

Ecuador's currency is the US dollar, so no conversion is needed. The scale is indexed to inflation every year.

Personal expense rebate

Since 2023 personal expenses no longer reduce income but the tax itself: by 18% of spending on housing, education, health, food and clothing. Expenses count up to 7 times the basic consumer basket, more with dependants. They are proven by receipts issued to your tax number.

Example. A $40,000 salary. Social security of 9.45%, $3,780, is deducted, leaving $36,220. Tax on the scale is about $2,895. The rebate of 18% of $5,000 personal expenses is $900. The result is about $2,000, or 5% of salary.

How much tax is taken from a salary in Ecuador: a worked example

From an Ecuadorian salary 9.45% goes to social security, and income tax is calculated on the rest using the annual scale. On an average professional salary the tax is small: the 18% rebate on documented personal expenses often wipes out most of it.

Worked example: an employee without dependants whose spending on housing, food, health, education and clothing is backed by receipts issued to their tax number. The rebate cannot exceed the tax itself. On top of salary the employer pays 11.15% social security and 0.5% to each of two training funds, plus a 13th salary, a 14th salary equal to the minimum wage ($482) and, from the second year, a reserve fund of 8.33%.

Corporate tax and dividends

An Ecuadorian company pays 25% corporate tax, and since August 2025 dividends have been subject to a single withholding tax: 12% for residents, 10% for non-residents and higher if the ownership chain includes a company in a preferential tax jurisdiction. The company withholds the full tax when profit is distributed, even if the money is paid out later.

A resident individual pays no dividend tax up to three minimum wages per company per year, $1,446 in 2026. The total burden on distributed profit for a resident owner is about 34%: 25% on the company's profit and 12% on the remainder.

Companies must also give employees 15% of pre-tax profit - not a tax, but statutory profit sharing that belongs in the calculation. For setting up a company see company registration in Ecuador, and for an account see business account in Ecuador.

VAT in Ecuador

The standard VAT rate in Ecuador has been 15% since April 2024. A zero rate applies to basic food, medicines, exports and a range of social services. There is no European-style registration threshold: anyone with a tax number selling taxable goods or services charges VAT, except those in the popular-business simplified regime.

VAT returns are filed monthly, and every six months for those selling only at the zero rate. Digital services from foreign companies, such as subscriptions and apps, are also taxed at 15%: the bank or payment provider withholds it when you pay by card.

Inheritance and gift tax

One scale covers inheritance, legacies and gifts. Close relatives get reduced rates, but plan family transfers in advance.

Property taxes: buying, owning, selling

Property in Ecuador is taxed mainly by municipalities, and the taxes are low by European standards. The main cost on purchase is a 1% transfer tax plus registration fees, and while owning, an annual tax of 0.25 to 5 per mille of the cadastral value, which is usually below market value.

Each municipality sets the rates within these limits, so the totals differ in Quito, Cuenca and on the coast. A foreigner buys property on the same terms as a citizen, and buying property above the set threshold is grounds for an investor residence permit.

Tax on sending money abroad

Ecuador charges 5% on all transfers and payments abroad, including card payments for foreign goods. Up to $5,188 a year can be transferred tax-free, and up to $1,446 in cash taken out per trip. Factor this in if you earn in Ecuador but spend or invest abroad.

There are exceptions. Dividends that an Ecuadorian company pays to a non-resident outside a preferential tax jurisdiction are exempt, and companies can credit the tax paid on imports of raw materials and equipment. For an individual the main way to save is to plan in advance which money you bring in and spend in the country and which you keep abroad.

Other taxes and contributions

The minimum wage in 2026 is $482 a month.

Simplified regime for small business

Tax is on revenue, not profit, so the regime pays off at high margins. Some professional services are excluded. Simplified regime returns are filed in May.

Taxes for non-residents and double tax treaties

A non-resident pays Ecuadorian tax only on Ecuadorian income, and the payer usually withholds 25%. Dividends to a non-resident are taxed at 10%. Lower rates are possible under a double tax treaty if the recipient proves residence in their own country.

Ecuador has about twenty treaties: with the Andean Community countries Bolivia, Colombia and Peru, and with Spain, Germany, France, Italy, Switzerland, Canada, Mexico, Chile, China and others. An Ecuadorian resident gets credit for tax paid abroad up to the Ecuadorian tax on the same income, and the tax authority issues residence certificates online.

Where there is no treaty, a resident's foreign income is still taxed in Ecuador on the scale, and foreign tax can only be credited under domestic law. So check before moving which countries your income will come from.

Returns and deadlines

• a foreigner gets a tax number at the tax office with a passport and residence document;
• the annual individual return is filed in March, 10 to 28 March depending on the ninth digit of the number;
• employees with one salary don't file if they have no other income and expenses are declared to the employer;
• tax paid abroad is credited up to the Ecuadorian tax on that income;
• the tax office issues a tax residence certificate online.

Filing or paying late costs interest for every month of delay plus a fine, so it is worth putting the deadlines set by the ninth digit of your tax number into your calendar as soon as you get the number. If you leave the country you also need to notify the tax authority, otherwise filing obligations keep accruing.

What changed in 2026

The 15% VAT rate has applied since April 2024; the tax on sending money abroad stays at 5%.

Common mistakes of new residents

• receipts for personal expenses lack your tax number, so the 18% rebate is lost;
• forgetting the 5% on card payments abroad and on transfers above the annual limit;
• not counting 12 months across two years and becoming resident earlier than expected;
• not exiting the previous country's tax residence and paying tax twice;
• when leaving for a low-tax country, ignoring that Ecuador treats the person as resident for four more years.

Comparison with neighbours

Ecuador taxes residents worldwide and charges a tax on sending money abroad. Those whose main income is foreign usually do better in territorial countries.

What it means if you relocate

Ecuador suits people who live on a moderate income and spend it in the country: the $12,208 tax-free amount and the personal expense rebate keep tax low, and prices are among the lowest in the region. It suits people with large foreign income less well: that income is taxed on the scale of up to 37%, and moving money back out costs another 5%.

• Where to start. Grounds for living in the country: the digital nomad visa or retiring in Ecuador.
• Where to live. Districts and prices in the capital are in our Quito guide, buying a home in buying an apartment in Ecuador, and the route to a passport in Ecuadorian citizenship.
• Taxes. How days are counted in different countries and what to do about dual residency is in our article on tax residency and the 183-day rule, and an overview of the country is on Ecuador.

What we do

We calculate taxes before the move, choose a residence permit, including for remote work, obtain a tax number, choose a business regime and, if needed, register a company, prepare returns and the exit from your previous tax residence. We fix our fee in writing after a free consultation.

For those still planning a move we calculate taxes in Ecuador and in your current country on the same figures: salary, dividends, rent and transfers, including the 5% tax on sending money abroad. We choose the business form - the simplified regime, the general regime or a company - and tell you upfront if Ecuador does not suit you on tax.

Features of the tax system

FAQ