Ecuador revises dividend taxes and non-profit reporting rules, effective 22 August 2025.
Ecuador has introduced new rules on dividend taxation and non-profit organizations, effective 22 August 2025. The law applies to income accrued from 1 January 2025 and establishes updated withholding tax rates and an advance dividend tax on undistributed profits.
Profits distributed by resident companies or permanent establishments are taxed when the distribution decision is made. Withholding tax rates are 10% for non-resident recipients, 12% for Ecuadorian residents, and 14% for shareholders in tax haven jurisdictions or if company disclosures are incomplete.
Advance dividend tax rates on retained earnings range from 0.25% to 2.5%, with credits available against future dividend or corporate income taxes. Resident individuals have an exemption equal to three unified basic salaries per company per year.
Non-profit organizations remain exempt from corporate income tax if they comply with registration and annual transparency reporting to the tax authority (SRI). Donations to qualifying NPOs remain deductible, and foreign contributions must be reported to avoid taxation.
Transfers of movable property, including vehicles and machinery, to public institutions are exempt from taxes, fees, and contributions.
