Ecuadorian Income Tax: SRI Rates and Residency Rules
Ecuador's income tax (Impuesto a la Renta — Ley Orgánica de Régimen Tributario Interno — LORTI) applies to residents on worldwide income and non-residents on Ecuador-source income. 2026 individual income tax rates (USD-denominated brackets): 0% (up to USD 12,208), 5% (USD 12,209–15,549), 10% (USD 15,550–20,188), 12% (USD 20,189–26,700), 15% (USD 26,701–35,136), 20% (USD 35,137–46,575), 25% (USD 46,576–62,005), 30% (USD 62,006–82,679), 35% (USD 82,680–109,956), 37% (above USD 109,956). Note: these brackets are adjusted annually — verify at sri.gob.ec. Non-residents: 25% flat withholding (retención en la fuente) on Ecuador-source income — employment income, dividends, royalties, rental income, capital gains. Tax residency: Ecuadorian tax residency if present in Ecuador for 183+ days in a consecutive 12-month period, OR if the individual's main economic interests or family nucleus is in Ecuador. Loss of residency: departure and cessation of 183-day presence. SRI does not require formal residency deregistration for most departing individuals — however, if you have pending SRI obligations (Impuesto a la Renta returns, VAT returns for self-employed), these must be filed and paid. Final return: file for the full departure year — April 30 of the following year. SRI Form: Form 102A (individuals) or 102 (individuals with business activity).
IESS Lump-Sum Contribution Refund: Key Benefit for Departing Foreigners
IESS (Instituto Ecuatoriano de Seguridad Social — iess.gob.ec) administers Ecuador's social security, health insurance, and pension system. Contributions: employees 9.45% of gross salary (desafiliado: aportación personal); employers 12.15% (aportación patronal). IESS pensión de vejez (old age pension): requires 480 monthly quotas (40 years) at age 65 for full pension; or 360 quotas (30 years) at age 65 for reduced pension. The unique Ecuadorian departure benefit — Fondo de Reserva and Devolución de Fondos: under Ecuadorian social security law (Ley de Seguridad Social, Art. 252 et seq.), foreign nationals who are permanently departing Ecuador and will not return to work in Ecuador can apply for a devolución de aportes — a refund of the employee's own IESS contribution history (the 9.45% employee share). This refund is available to foreign nationals; Ecuadorian nationals may face different rules depending on their contribution history. Process: (1) Obtain a declaration of permanent departure from the relevant authority or notarise your intent to permanently depart Ecuador. (2) Submit to IESS your: passport; RUC/DIMM number (SRI taxpayer registration); personal IESS affiliation number (número de afiliación); employment history documentation. (3) IESS processes within 30–60 working days. (4) Amount: the refund equals your personal 9.45% contributions × months of contribution × assessed salary base — plus interest (based on IESS actuarial adjustments). (5) Tax: subject to Impuesto a la Renta as income. SRI withholds at applicable rates. Important: verify current IESS administrative rules at iess.gob.ec — the devolución de aportes for non-citizens has been subject to administrative reform and the specific qualifying conditions may have changed.
Real Estate: Capital Gains Tax and Transfer Procedures
Ecuador's capital gains tax on real estate (Impuesto a la Ganancia Extraordinaria en Enajenación de Bienes Inmuebles) was reformed under the LORTI amendments: Rate: 10% on the net capital gain (selling price minus acquisition cost, adjusted for inflation using the SRI-approved inflation adjustment index). Calculation: (Selling price − Inflation-adjusted acquisition cost − Capital improvements) × 10%. Pre-reform properties: gains on properties acquired before the reform date may have different treatment — verify with SRI. The NotarÃa collects at transfer: the notary withholds the estimated CGT at the point of transfer and remits to SRI. The seller files a final SRI return to reconcile. Property transfer tax: 1% of the higher of the transaction price or SRI cadastral value. Municipal stamp duty: approximately 0.5–1% of value (municipio-dependent). PlusvalÃa Municipal: some municipalities charge an additional Impuesto a la PlusvalÃa (betterment tax) on property value increases — this is separate from the national CGT. Annual property tax: impuesto predial based on municipal cadastral value — rates vary by municipality but are typically low by international standards (0.25–0.5%). Non-resident property retention: fully legal. As a non-resident, you retain full ownership of Ecuadorian real estate. Rental income from Ecuadorian property as non-resident: 25% withholding at source.
USD Economy and International Transfers
Ecuador adopted the US dollar as its official currency in 2000 following the 1999 banking crisis. The Sucre (ECS) was replaced by USD at 25,000:1. Result: Ecuador has no central bank currency and no independent monetary policy — all transactions are in USD. For departing individuals: no currency conversion risk, no foreign exchange controls on legally obtained USD. Bank transfers abroad: all major Ecuadorian banks (Banco Pichincha, Banco del Pacifico, Produbanco, Banco Internacional) offer international wire transfers in USD. Requirements: standard AML documentation — declaration of origin of funds, passport, SRI tax ID (RUC/DIMM), purpose of transfer. UAF (Unidad de Análisis Financiero): Ecuador's financial intelligence unit requires reporting of suspicious transactions. Large outgoing transfers (above USD 10,000) are subject to standard bank AML reporting. Ecuador abolished the Impuesto a la Salida de Divisas (ISD) in 2024 — previously a 5% tax on international wire transfers, the ISD was one of Latin America's most punishing money transfer taxes. Its abolition significantly improved Ecuador's attractiveness for international business and transfers. Verify current status at sri.gob.ec as this was a significant legislative change. Large lump sums (property sales, IESS devolución): coordinate with your Ecuadorian bank's international transfers team.