Through Circular NAC-DGECCGC25-00000002, published in Official Register 727, Fourth Supplement, on January 22, 2025, the Internal Revenue Service reminded taxpayers of the criteria to determine whether a jurisdiction is considered a tax haven.

For this purpose, taxpayers must analyze each case to determine whether at least two of the following conditions, established in the second unnumbered article following Article 4 of the Internal Tax Regime Law, are met:

  1. Having an effective income tax rate lower than 60% of the rate applicable in Ecuador or where the rate is unknown.
  2. Allowing the performance of economic activities without substantial development in the jurisdiction to qualify for tax benefits.
  3. The absence of effective information exchange in accordance with international transparency standards, such as information on legal owners and beneficial owners, reliable accounting records, and banking information.

Therefore, even if a jurisdiction is not explicitly included in the lists issued by the Internal Revenue Service, it may still be considered a tax haven.

 

Andrea Moya, Partner at CorralRosales
amoya@corralrosales.com
+593 2 2544144

© CORRALROSALES 2025
NOTE: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm in Quito / Guayaquil, Ecuador.

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