Ecuador has recently implemented a Value Added Tax (VAT) cut on electric generator imports and local sales as part of a comprehensive strategy addressing the national energy crisis resulting from extended periods of drought that have adversely affected electricity generation.
The VAT has been cut from 15% to 0%.
Ecuador’s President issued Executive Decree No. 411 to reform the VAT treatment of electric energy, published in the Official Gazette on 3 October 2024. The decree expands the definition to include the import and local sale of electric generators, along with their parts and components.
