Income Tax for Sports Betting Operators

The Executive Decree 313 issued June 27, 2024, by the President of the Republic of Ecuador regulates the Unique Income Tax for Sports Betting Operators. Below are the key points summarized:

1. Assessment and payment of the tax: Taxpayers parties must declare and pay the tax monthly. Sports operators with tax residence in Ecuador must file an annual tax form consolidating the amounts declared monthly.
2. Taxable Base: It is equal to the total income generated, including commissions, minus total paid prizes, provided that 15% tax was withheld from these prizes at the time of payment.
3. Tax Rate: A flat rate of 15% applies to the taxable base.
4. Withholding: Prizes paid by resident and non-resident operators are subject to a 15% withholding. The prize is the amount the player is entitled to when their prediction is correct, excluding the accrued forecast, i.e., the amount wagered by the player.
5. Receipts: Resident or non-resident operators must issue sales receipts. One sales receipt per player per sporting event may be issued. Regarding withholding, one withholding receipt may be issued for all prizes awarded to the same player during the month.
6. Implementation Period: Operators have 6 months to adjust their systems and implement the necessary mechanisms to comply with the applicable formal obligations.
7. Non-resident Operators: Non-resident operators must obtain their Unique Taxpayer Registry (RUC). Obtaining a tax ID in Ecuador does not imply that operators have a permanent establishment in the country. However, the Ecuadorian representative must retain supporting information for 7 years.