Ecuador has enacted a new law granting VAT and import duty exemptions for private-use EVs and expanding flexibility in tourism-related VAT reductions, effective from 14 July 2025.
Ecuador has introduced tax relief for private-use electric vehicles (EVs) and expanded flexibility in tourism-related VAT reductions under the Strengthening of Protected Areas Organic Law, published and effective from 14 July 2025.
The new law exempts the import of private-use electric vehicles from VAT and import duties, excluding motorcycles and hybrid vehicles. It also extends the excise tax exemption to private-use vehicles powered entirely by renewable energy sources such as electricity or hydrogen, provided they produce no direct emissions. This exemption does not apply to hybrid or combustion-engine vehicles.
In the tourism sector, the law removes the previous 12-day annual limit on the Executive Branch’s authority to temporarily reduce VAT rates, allowing for greater flexibility in applying such reductions.
