On 16 August 2022 the Global Forum for Transparency and Exchange of Information for Tax Purposes released a second round (phase 1) peer review report in relation to Ecuador. The peer review report examines the legal and regulatory framework in Ecuador and its compliance with the international standard on transparency and exchange of information on request (EOIR). The practical implementation of the legal framework will be examined at a later date in phase 2 of the second round peer review.
The report notes that Ecuador has a legal and regulatory framework that ensures the access to exchange of relevant tax information but the framework requires improvement in relation to the availability of information.
The Superintendency of Companies, Securities and Insurance is responsible for the Companies Register and holds up to date information on legal ownership of domestic companies. The tax administration also holds information on beneficial ownership of legal entities and legal arrangements. A law of November 2021 set up a register of beneficial owners, and the law is currently being implemented. Beneficial ownership information is also collected through the anti-money laundering (AML) regulations. Banking information is generally available, but the report notes that some aspects relating to the beneficial ownership of the bank accounts require improvement.
The report notes that there are gaps in the availability of beneficial ownership information and the availability of accounting information. There is currently no reliable source that ensures that beneficial ownership information is available in all cases. Although a law has been passed to set up a register of beneficial ownership, the implementing regulations are still to be issued and an assessment of the alignment of the law with the international standard cannot be made until these regulations are issued.
In relation to accounting records, the peer review report recommends that these should be available for at least five years after a company has been dissolved or has relocated abroad.
Ecuador has agreements authorising exchange of information with 146 countries. The exchange of tax information is authorised by the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, 20 double taxation agreements, four tax information exchange agreements and a regional agreement. A legal framework is in place for effective access to information and in recent years Ecuador has received an average of five requests for information each year, from South American or European countries. The practical implementation of the legal framework will be assessed in phase 2 of the peer review.
Ecuador in its response to the peer review noted that planning will begin to implement measures ensuring frequent updates to beneficial ownership information. Ecuador is also continuing to expand its network of agreements for exchange of tax information.
