Ecuador: VAT on Digital Services kicks in September 2020
From the 16 September 2020, there will be a VAT (12%) obligation on Digital services. Non-resident providers of digital services may register with the Ecuadorian tax authority but this is not mandatory.
The new law was published in the official gazette on 31 December 2019 and introduces a new VAT liability on digital services.
What is considered a digital service in Ecuador?
The new law states that the following constitutes as a digital service:
- Serviced provided through the internet
- Automated services that have minimum human intervention
This means that the following services will be subject to VAT:
Detailed services listing
Web-page supply and other services related to assisting a business in maintaining an online presence
- Computer programmes, apps, SaaS via cloud downloads
- Remote preventive and corrective maintenance
- Administration of remote services and online technical support
- Web-based services including data storage and online publicity
- Any platform that allows for the downloading of images, text, video, sporting events, music, games (including gambling), movies, ringtones, online news, traffic and weather updates, statistics services, and any other audiovisual content available via an internet connection
- Database-related services
- Online clubs and dating sites or apps
- Online blogs, magazines, and newspapers
- Internet-rendering services
- Remote tests graded in an automated manner
- Online marketplace (delivery services of movable goods), online bidding, job advertising webpages, and transportation and accommodation services offered online
- Manipulation and calculation of data through the internet
- Other services as defined by the tax authority through a generally binding resolution (applicable to all taxpayers)