Thursday, February 28, 2008

Taxes in Ecuador

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Click here to read this post at the new BLOG.

Pro-Ecuador received the following question:

"I am researching retirement options in Ecuador. I found conflicting information on this site and Global Investors regarding Ecuador’s tax on personal income not earned in Ecuador. I do not plan to work and will live off existing income from my USA Investments. Global Investors says that Ecuador taxes personal income earned outside Ecuador at 25%. What is the straight scoop?"
Pro-Ecuador Reply:

You are only taxed on income earned in Ecuador. Your investment income from the United States will not be taxed in Ecuador. If you do not work in Ecuador you will have no need to file an Ecuadorian tax return.

This information comes from the following Ecuadorian law:

Internal Tributary Regime Law of Ecuador

Art. 102. - Treatment of foreign income. - All natural persons or companies resident in Ecuador that obtain income from outside of the country, for which they are taxed for in another country, will exclude themselves from the tax basis in Ecuador and consequently they will not be put under imposition. In the case of originating rents of fiscal paradises the exemption would not apply and the income would be considered in the calculation of income earned in Ecuador.

Original text in Spanish:

Art. 102.- Tratamiento sobre rentas del extranjero .- Toda persona natural o sociedad residente en el Ecuador que obtenga rentas en el exterior, que han sido sometidas a imposición en otro Estado, se excluirán de la base imponible en Ecuador y en consecuencia no estarán sometidas a imposición. En el caso de rentas provenientes de paraísos fiscales no se aplicará la exención y las rentas formaran parte de la renta global del contribuyente.

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