Ecuador issued new rules for advance tax on undistributed profits under Executive Decree No. 191.
Ecuador has issued Executive Decree No. 191, introducing new rules for the advance payment of income tax on undistributed profits. Published in Official Gazette No. 153 on 28 October 2025, the decree sets out clear procedures for calculating, declaring, and paying the tax.
Under the decree, companies must declare and pay the advance tax for fiscal year 2025 by November, following the schedule for Income Tax withholding obligations for September 2025. Payments may be made in two equal installments in November and December, with no additional agreements allowed.
Holding companies and financial or insurance entities restricted from distributing profits by their controlling body are exempt from the payment. The advance tax is calculated based on the 2024 income tax return filed by 31 July 2025, excluding any substitute or amended returns.
The regulations aim to provide a more structured framework for companies subject to this obligation, ensuring compliance with Ecuador’s Organic Law of Social Transparency.
