With its low cost of living, stunning natural beauty, and welcoming communities, Ecuador has quickly become one of the top destinations for expats in South America.
In this guide, we’ll walk you through everything you need to know about relocating to Ecuador from a personal tax perspective, including tax residency, income tax, special tax regimes and tax return obligations.
TaxPilot recommend that you organize your affairs in good time to get ahead and make the most of favorable tax treatment while making sure you’re meeting your tax return obligations.
Ecuador follows a residence taxation model. If you are resident, you will pay tax worldwide incomes. If you are non-resident, you will pay tax on local incomes only.
if you are present in Ecuador on more than 183 days during any 12 month period.
Providing that you hold the digital nomad visa, employment income and self-employment income will be exempt from taxation in Ecuador. Ecuador can be a very tax efficient place to live in and as such, Global Tax Consulting recommends seeking personalized tax planning advice to take advantage of the special tax regime.
Exempt from Ecuador taxation.
Must hold the digital nomad visa.
Tax on property and share sales
Tax on value of owned assets
Tax on assets passed to heirs
Tax to contribute to state welfare
If you receive incomes overseas while you are living in Ecuador, you may find the source country, as a starting point, continues to tax the income which may cause double taxation unless you are using special tax regime.
Double taxation agreements can be used to mitigate double taxation and receive tax free income. As such, the more double taxation agreements a country has, the better, as agreements will ensure you’re not taxed twice and even better, ensure your income is tax free.
At present, Ecuador has 23 double taxation agreements signed.
