Taxpayers must continue applying existing transfer pricing rules for related-party marketing and distribution activities as the tax authority confirms the OECD’s simplified framework has not been adopted.
Ecuador’s Internal Revenue Service (SRI) has clarified that the OECD’s Pillar One – Amount B framework has not been adopted in the country, reaffirming that taxpayers must continue to apply existing domestic transfer pricing rules to routine marketing and distribution activities.
The position was set out in Circular No. NAC-DGECCGC26-00000001, issued on 25 March 2026, which confirms that the OECD’s simplified approach has no binding legal force in Ecuador in the absence of a specific normative act implementing it.
Under Ecuadorian law, transactions between related parties must comply with the arm’s length principle, meaning they must be carried out under conditions comparable to those agreed between independent parties. Where terms differ and result in reduced taxable profits, the foregone income remains subject to taxation. The SRI also reiterated its authority to issue circulars and technical provisions to ensure the proper administration of tax laws, including transfer pricing standards.
While Ecuadorian regulations recognise the OECD Transfer Pricing Guidelines as a general technical reference, their use remains subject to consistency with domestic legislation, international treaties and SRI resolutions.
Amount B, developed under the OECD/G20 Pillar One, is intended to simplify the application of the arm’s length principle for baseline marketing and distribution activities through streamlined methodologies and safe harbour-style rules. Its stated objective is to reduce administrative burdens and minimise transfer pricing disputes. However, the OECD framework is optional, allowing each jurisdiction to decide whether to implement it.
In its official pronouncement, the SRI stressed that, because Ecuador has not enacted any legal instrument to adopt the simplified rules, neither taxpayers nor the tax administration may rely on Amount B as a binding standard. Instead, transfer pricing analyses must continue to be prepared under the existing framework, including the Law of the Internal Tax Regime, its implementing regulations and relevant SRI resolutions, notably NAC-DGERCGC16-00000531 and NAC-DGERCGC16-00000532.
The circular entered into force on the day following its publication in the Official Gazette.
