Ecuador proposes to introduce VAT on e-services from 2020

18 November 2019

Ecuador is the latest country to propose a VAT charge on the sale of e-services to local consumers by non-resident businesses.

At present, non-resident businesses providing digital services in Ecuador do not have to charge VAT on their sales. However, in an effort to remove the unfair advantage that this gives to non-resident companies over Ecuadorian resident providers, the Ecuadorian tax authorities are proposing that VAT should be charged at 12% on these types of transactions.

If accepted the measure is likely to be introduced from January 2020 and will be applied to a range of electronic services including streaming games, music, apps, films, e-books, e-journals and internet services.