Renewal – Tax benefits to new investments

1. New investments made in prioritized sectors will be exempt from paying income tax according to the following:
   • Investments made in the urban areas of Quito and Guayaquil will be entitled to an income tax exemption for 8 years.
   • Investments made outside the urban areas of Quito and Guayaquil will be entitled to an income tax exemption for 12 years.
   • Productive investments in industrial, agro-industrial, and agro-associative sectors, made in border jurisdictions will be entitled to an income tax exemption for 15 years.

In the case of existing companies, the exemption will be applied proportionally according to the following alternatives:

• If the company is able to divide its assets, liabilities, income, costs, expenses, profits, and labor participation attributable to the new investment, the exemption may be applied by cost center.
• The company is able to apply the benefit proportionally according to the following formula:

The reduction in the income tax rate may not be greater than 10 percentage points, unless the Strategic Committee for the Promotion and Attraction of Investments (CEPAI) authorizes a higheer reduction.

2. Companies that make productive investments in any sector of the economy, and that enter into an investment contract with the Government, will be exempted from paying Foreign Exchange Tax (ISD) over the following payments:
   • Import of capital goods and raw materials necessary for the development of the project, up to the amounts and terms established in the investment contract.
   • Dividends distributed individuals with tax residence in Ecuador as long as the resources come from abroad and the investor demonstrates the entry of such resources in the country.