Doing Ecuadorian Taxes

Expatriates living in Ecuador are subject to the same sales tax as the locals. Most purchases have a 12% value added tax (IVA). Usually the tax is included in the price quoted, although in some restaurants and hotels it may not be. Normally this tax does not bother foreigners as prices in Ecuador are fairly low.

Property tax is significantly cheaper in Ecuador than in many other countries and is usually only 0.2% of the assessed value of the property. As buying land or homes in Ecuador is relatively cheap, property taxes are usually only slightly more than the cost of Chinese take-out in countries like the USA and England. To pay these taxes, the owners, or someone acting on their behalf, must go and pay at the Distrito Metropolitano of the city where the property is owned. In Quito, this is located in Centro Histórico on Chile between Venezuela and Guayaquil. Obviously, you must bring the Numero De Predio, or official house registration number, with you. The process normally takes an hour including waiting time.

The Ecuadorian government taxes individuals and businesses only on money earned in Ecuador. The scale ranges from 5% to a maximum of 25% depending on your income. Like Ecuadorians, foreigners living in Ecuador must file through SRI, the Ecuadorian Internal Revenue Service. Although it’s possible to file on one’s own, if you do not speak Spanish fluently and own your own business, or have a complicated filing, it’s best to get help from an accountant. Refunds can be directly deposited into bank accounts if the person meets certain requirements. URL: <u>www.sri.gov.ec</u>.