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October 7, 2022
2022-1515

Ecuadorian Tax Authority reforms definitions and tax treatment for Tax Havens, Minor Tax Jurisdictions and Special Tax Regimes

  • The Ecuadorian Internal Revenue Service, through an Administrative Resolution, modified the list of regimes and jurisdictions considered as Tax Havens.
  • In addition, the Tax Administration eliminated the concepts applicable to differentiate a Minor Tax Jurisdiction and Special Tax Regimes as other countries or jurisdictions not included in the Tax Haven lists but still treated as it.

Modification of the tax haven list

The following jurisdictions and regimes have been removed from the list of tax havens effective as of 3 October 2022:

  • Svalbard - Spitsbergen
  • Gibraltar
  • Grand Duchy of Luxembourg
  • Isle Of Man - Mann
  • Channel Islands
  • Principality Of Liechtenstein
  • Republic Of Albania
  • Republic Of Cyprus
  • Republic Of Malta
  • Republic Of San Marino
  • Ostrava
  • Ireland (in relation to its corporate income tax treatment in Section 71 of its Finance Law that granted a 12,5% tax rate – Minor Tax Jurisdiction)

Other applicable changes in the Law

Furthermore, the Ecuadorian Internal Revenue Service eliminated the following concepts: minor tax jurisdiction, special tax regime, special tax regimes specifically in Costa Rica, Netherlands, New Zealand, and the United Kingdom.

At the moment, there is no regulatory or complementary legislation on these changes. Accordingly, it is anticipated that the Tax Authority will confirm whether it will issue new legislation or if such concepts are indefinitely eliminated.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

EY Addvalue Asesores Cia. Ltda., Quito

EY Addvalue Asesores Cia. Ltda., Guayaquil

Ernst & Young LLP (United States), Latin America Business Center, New York

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

 

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