| Update: | Compliance Alert – Increase of specific VAT rates from 1 April 2024 |
| Date: | 2024-03-26 |
On 15 March 2024, the Presidency of the Republic of Ecuador signed Executive Decree 198, which increased the general VAT rate from 13% to 15%, using the prerogative granted in the tax reform.
Initially, a permanent increase from 12% to 13% was proposed, with an option for the president to raise it to 15%.
The decision was based on the recommendations and approval from the Ministry of Economy and Finance to cover additional commitments and expenses in terms of security and defence.
Additionally, a VAT rate of 5% was established on 12 March 2024 in the First Supplement No. 516 on local transfers of construction materials.
These changes become effective as of 1 April 2024.