The Internal Revenue Service (SRI) plans to temporarily suspend its website ( www.sri.gob.ec) and digital services like SRI Mobile and SRI & Me for scheduled technological maintenance. This interruption will occur between 00:00 and 10:00 on Saturday the 20th.

Seniors and people with disabilities qualify for (limited) VAT refunds.

According to Primicias, the Internal Revenue Service (SRI) has announced that these VAT refunds will only apply to purchases made at establishments authorized by the Internal Revenue Service (SRI). It will publish on its website a list of these authorized establishments. The SRI will only qualify establishments that are up to date with their VAT declarations and payments over the last 12 months.

The legal base for this new policy is the Reglamento General de Aplicación a la Ley Orgánica para el Fortalecimiento de las

Actividades Turísticas y Fomento del Empleo, which came into effect on July 15, 2024.

Note that the SRI is behind on returning VAT. According to the agency, it is now working on refunds for March, but there are also expats who say that they have not yet received any refunds this year.

The municipality of Cuenca collects taxes, contributions, and fees from its citizens every year. In 2024, it expects to collect USD 81 million.

If you own real estate in the canton of Cuenca, you will need to pay municipal property taxes.

If you don't own real estate or run a business in the canton of Cuenca, you usually don't directly pay taxes and contributions. The municipality collects many of its contributions via utility companies. When you pay for electricity and water, you'll see, for example, additional items for the fire department and waste collection on your invoices.

What do you must pay

In case you must make a direct payment, you'll receive a printed payment note that specifies what you must pay.

Payments can fall into three categories:

• Municipal taxes
• Improvement contributions (for road improvements, for example)
• Fees

Discounts

For property taxes, you'll receive a discount depending on when you pay. The earlier you pay, the higher the discount.

• January 1 to 15: 10%
• January 16 to 31: 9%
• February 1 to 15: 8%
• February 16 to 28: 7%
• March 1 to 15: 6%
• March 16 to 31: 5%
• April 1 to 15: 4%
• April 16 to 30: 3%
• June 1 to 15: 2%
• June 16 to 30: 1%

Improvement contributions

There used to be discounts for improvement contributions as well, but the Comptroller's Office stated last year that there is no legal basis for these discounts. Therefore, the municipality will no longer give discounts when you pay improvement contributions. People who have received discounts on improvement contributions from 2018 to 2023 must pay back these discounts. In 2024, the municipality will collect the discounts that were given in 2018.

How to pay

You can pay your taxes, contributions, and fees online or at one of the 200 payment points.

Online: Pago de impuestos, tasas y contribuciones. On this website, you can pay in two ways: by bank transfers or by credit card.

Payment points include:

• Municipal Treasury Office (Calle Sucre and Calle Simón Bolívar in the historic center): from 8 am to 7 pm until January 15.
• Mayor's Office (Calle Simón Bolívar and Calle Borrero in the historic center): from 8 am to 5.30 pm until January 15.
• Parque La Libertad Municipal Office (Calle Nicanor Merchán and Avenida Héroes de Verdeloma): from 08:00 to 17:30 until January 15.
• Municipal Control Office (second floor of the Cuenca Airport): from 8 am to 5:30 pm until January 15.
• Offices and stores of municipal companies such as EMOV, ETAPA, and Farmasol.
• 11 banks and credit unions.
• Payment points of Servipagos, Western Union, and Facilito.

On December 29, 2023, President Noboa decreed that the rate of the capital outflow tax won't be lowered until at least December 31, 2024. This means that the tax rate will remain at 3.50%. The president has stated that declining tax collections make it impossible to further lower this tax rate.

The capital outflow tax (impuesto a la salida de divisas - ISD) applies to remittances abroad in cash or by check, transfers, and withdrawals of any kind. You must pay this tax, for example, when you send money from Ecuador to a foreign country. The rate of the capital outflow tax used to be 5%. In 2022, the tax rate was gradually lowered from 5% to 4%. In 2023, the tax was gradually lowered to 3.50% on July 1. Ex-President Lasso planned to reduce the rate to 2% on December 31, 2023, to attract more foreign investments. He originally wanted to abolish this tax, but the Ecuadorian parliament didn't support this plan.

The Ecuadorian capital outflow tax (Impuesto a la Salida de Divisas - ISD) is levied on remittances abroad. Ecuador is one of the few countries that has this tax. The capital outflow tax can affect citizens, residents and visitors to Ecuador.

Tax rate

The tax rate of the capital outlow tax is 5% (since April 1, 2024).

Tax base categories and exemptions

Below you can read the situations to which the capital outflow tax applies in the case of natural persons.

Traveling abroad with money

The capital outflow tax is levied on money that a person brings out of Ecuador by leaving the country. The amount of money that is exempted is three basic salaries per year ($1.380 in 2024). If the amount of money that is brought out of Ecuador is higher than that figure, the capital outflow tax will be levied on the excess value.

When a minor travels alone, the exempted amount of money for the minor is three basic salaries (as in the case of an adult). In the case of minors traveling accompanied by an adult, the exempted amounts of money for the minors are reduced to zero and the exempted amount of money for the adult is raised with one basic salary for each minor ($460 in 2024).

Purchases abroad with Ecuadorian credit and debit cards

The capital outflow tax is also levied on purchases made with an Ecuadorian credit or debit card while being abroad. $5,109.8 is exempted for purchases in 2023. If the value of the purchases is higher than this figure, the capital outflow tax will be levied on the excess value.

Purchases from Ecuador

Purchases in Ecuador with a credit or debit card to companies domiciled abroad are taxable for the capital outflow tax for the amount that exceeds three basics salaries per year ($1,380 per year). This group includes purchases in webshops such as Amazon and Alibaba and paying for streaming services such as Netflix, HBO and Spotify.

Sending money abroad

Sending money abroad via bank transfers or with courier companies such as Western Union is also taxable for the capital outflow tax for the amount that exceeds three basic salaries per year ($1,380).

Studying abroad

The capital outflow tax doesn’t apply to expenses related to studying abroad if the school or university is approved by the Ecuadorian authorities.

Healthcare expenses

The capital outflow tax doesn’t apply to expenses made because of catastrophic illnesses. Examples of expenses are: hospitalization, surgeries, exams, medical fees, medicines, medical therapies and prepaid plans. The capital outflow tax applies to the amount of expenses that exceeds $5,861 (in 2023).

Background

The Ecuadorian capital outflow tax was introduced in 2007 during the presidency of Rafael Correa to protect the use of the US dollar as national currency in Ecuador. The capital outflow tax is one of the measures to disencourage people and companies to send money abroad. Other measures are import taxes.

Developments

Under president Correa and Moreno, the tax rate was 5%. During the presidential elections in 2021, president Lasso promised to abolish the capital outflow tax to attract more foreign investments. Because the parliament didn't want to abolish the outflow tax, president Lasso decided to gradually lower the tax rate to 2%. The Ley Orgánica de Fomento Productivo from 2018 allowed him to lower the tax rate. In 2022, the tax rate was gradually lowered from 5% to 4%. In 2023, the tax rate was be gradually lowered to 3.50% on July 1. Ecuador's current president, Noboa, decreed on December 29, 2023, that the tax rate won't be lowered further until at least December 31, 2024, because of Ecuador's budget crises. President Noboa has increased the tax rate to 5% since April 1.