Our partner specialized in Tax, Andrea Moya, published an
article in Bloomberg where she explains that starting September 16,
2020, digital services will be subject to 12% VAT due to an
amendment made to the Internal Tax Regime Law. Additionally, she
analyses some of the matters to be considered by the nonresident
digital service providers.
Our partner explains "If the entity registers in Ecuador as
a nonresident digital service provider, the entity will be required
to collect the VAT from the consumer and pay the VAT to the tax
authority. If the entity does not register in Ecuador as a
nonresident digital service provider, and the payment is made
through an intermediary, for example through a credit or debit
card, the credit card issuer will be required to withhold the VAT
from the consumer and pay the VAT to the tax authority. If the
payment is not made through an intermediary, the consumer will be
required to liquidate and pay the VAT to the tax
authority."
