VAT News

Ecuador Enforces 12% Digital Services VAT

Ecuador Enforces 12% Digital Services VAT

Ecuador is the latest country to officially introduce VAT on digital services. Foreign businesses providing e-services to Ecuadorian residents, will need to register for VAT in Ecuador in order to remain compliant.  

Nonresident businesses can act as collection agents for VAT by registering with the Ecuadorian tax authority. The process for VAT payments to the tax authorities will be as follows: 

  • 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. (source)

VATGlobal is able to offer assistance in the registration process and compliance maintenance within Ecuador, for any queries contact 

How do I know if my business is providing Digital Services?

Digital services or e-services are defined as a service offered to customers over the internet. If your product is a subscription service that is made possible by the internet (such as Adobe suite or Shopify, woo commerce etc) then your business is providing digital services and should look into which countries now impose the need to register for VAT to remain compliant. 

Related articles

Coronavirus: Online Gaming and Digital Conferencing Surge May Mean Extra Attention to VAT Compliance 

The Coronavirus outbreak has lead to a surge in the usage of certain digital services such as online gaming and conferencing apps.

Read more
Covid-19 VAT Implications Worldwide 

Covid-19 VAT implications around the world and what governments are doing to help.

Read more
The Essential Amazon VAT Guide for Online Sellers

According to European law, if your business sells goods directly to customers (B2C) via the internet, your business will be obliged to register for VAT

Read more