Ecuador is currently in a state of tax reform and many different areas of tax policy are being adjusted. This is undoubtedly creating some strain on a number of different companies and industries within the country. From an accounting perspective, this tax reform strives to make the overall corporate tax system much simpler and will further improve the financial structure of the government as they attempt to eliminate fuel subsidies.
At this point, companies are subject to a flat-rate income tax of 25% after workers’ and employees’ profit shares have been deducted (approximately 15%). Additionally, personal tax rates will remain the same at a variable rate of 5-35% based on a number of factors.