Ecuador Corporate Tax Guide 2026

Overview — CIT 25%

Ecuadorian resident companies are subject to corporate income tax on their worldwide income at a standard rate of 25%. Non-resident companies are taxed only on Ecuadorian-source income at the same rate. The tax year is the calendar year. Corporate tax returns must be filed by April 30 of the following year.

Reduced CIT Rates

Ecuador offers several reduced corporate tax rates to encourage investment and support smaller businesses:

• 20% — Reinvested profits: Companies that reinvest profits in productive assets, technology, or job creation may benefit from a reduced rate on the reinvested portion
• 10% — Micro-enterprises: Companies with annual revenue below $100,000 qualify for a reduced 10% CIT rate
• 3% — Popular and solidarity economy: Entities in the popular and solidarity economy sector (cooperatives, community organisations) are taxed at 3%

Taxable Income and Deductions

Corporate taxable income is calculated as gross revenue minus allowable deductions. Key deductible expenses include:

• Operating expenses directly related to business activity
• Employee salaries and IESS social security contributions
• Depreciation of fixed assets (straight-line method generally required)
• Interest on business loans
• Advertising and marketing expenses
• Rental expenses for business premises
• Taxes paid (except income tax itself)

Withholding Tax on Payments

Companies in Ecuador must withhold tax on certain payments to third parties:

• Dividends: 10% WHT (0% for resident individuals)
• Interest: 0% WHT for residents, 10% for non-residents
• Royalties: 25% WHT for non-residents
• Professional fees: Withholding at applicable IIT rates

Filing and Payment

Corporate tax returns are filed annually through the SRI online portal by April 30. Companies must also file monthly IVA (VAT) returns and make monthly advance payments of corporate tax. Estimated payments are required in July and September of the current tax year.

FAQs

What is the penalty for late filing?

Late filing penalties range from 5% to 25% of the tax due, plus interest at the applicable rate set by SRI.

Can losses be carried forward?

Yes, net operating losses can be carried forward for up to five years.

Are there thin capitalisation rules?

Yes, Ecuador applies thin capitalisation rules limiting interest deductions on related-party debt exceeding a 3:1 debt-to-equity ratio.

Disclaimer

This guide provides general information about Ecuador corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Ecuadorian tax advisor or SRI directly.