The new dividend tax rules and tightened oversight rules were introduced under the Social Transparency Law.
Ecuador has published new regulations governing the taxation of dividends and profit distributions for resident companies and permanent establishments, as part of the Organic Law on Social Transparency, in the Official Gazette on 28 August 2025.
These measures were further clarified and implemented through Executive Decree No. 191, issued on 27 October 2025.
The legislation establishes a broad framework aimed at promoting transparency, integrity, and accountability across both for-profit and non-profit sectors. It targets Non-Profit Social Organisations (OSSFLs) by requiring registration in a Unified Information System, enforcing financial transparency, and applying risk-based supervision through the Superintendency of Popular and Solidarity Economy.
The law seeks to prevent money laundering, corruption, and the financing of illicit activities, including illegal mining.
Key provisions of the new rules include:
- Tax reforms on the distribution of dividends and profits, including rules on the payment of income tax advances for corporations.
- Detailed operational, supervision, and control requirements for OSSFLs, with obligations varying according to a risk classification system (low, medium, or high).
- Mandatory compliance measures for financial reporting and transparency to ensure integrity and reduce risks of illicit activity.
- Updates to existing regulations in sectors such as finance, mining concessions, and public sector asset management.
