The tax reform adds certain goods to the list of transferred or imported goods that are subject to a 0% VAT rate. The tax reform also amends the list of VAT withholding agents.
In addition, the tax reform imposes a 12% VAT rate on digital services, when the consumer is an Ecuadorian resident.
Nonresidents may act as collection agents for VAT by registering with the Ecuadorian tax authority. For the VAT payments on digital services:
- The nonresident acts as a collection agent of the VAT if the supplier is registered in Ecuador.
- The VAT is directly assumed by the importer of the service if the supplier is not registered in Ecuador.
- The credit card company will act as a withholding agent if there is an intermediary involved in the payment process.