Ecuador: Digital services subject to VAT

Ecuador: Digital services subject to VAT

Digital services provided to persons in Ecuador are subject to value added tax (VAT) at a rate of 12%.


Related content

The law known in English as the “Organic Law for Tax Simplicity and Progressiveness” (and published in the official gazette on 31 December 2019) introduced the VAT liability for digital services. The effective date is 16 September 2020.

Rules for administering the VAT measures on digital services (approved by the president on 28 July 2020) provide a definition of digital services; lists digital services subject to VAT; and set out the mechanism for VAT withholding and proof of compliance.

The rendering of digital services is described in these administrative rules as: (1) services rendered or provided through the internet; (2) services that have an automatized nature and, therefore, minimum human intervention is needed to provide them; and (3) the device used to download or visualize these services does not determine the nature of such services. Under the administrative rules, digital services that are subject to VAT include:

  • Web-page supply and other services related to assisting a business in maintaining an online presence
  • Digitalized products (computer programs)
  • Remote preventive and corrective maintenance
  • Administration of remote services and online technical support
  • Web-based services including data storage and online publicity
  • Software services through cloud downloads
  • Access to and allowing downloads 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
  • Data base-related services and any other services rendered automatically through a computer system
  • Online clubs and dating webpages
  • 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)

Note that the supply of webpage dominions, hosting servers, and cloud computing-related services are subject to VAT at a rate of 0%.

The tax authority will publish, on a quarterly basis, a list of service providers subject to VAT on their digital services. Non-domiciled providers of digital services may register with the tax authority (this registration is not mandatory).

Concerning payment, VAT on digital services will be added and is to be withheld by the credit or debit card provider so that when the user pays for the digital services, the account statement issued will be considered to be proof of the withholding. When payments are made other than by credit or debit card, the Ecuador taxpayer must issue a settlement statement for acquisition of goods or rendering of services for which VAT (at a rate of 12%) must be added and “self-withheld.”

For more information, contact a tax professional with the Tax Group of KPMG’s Latin American Markets or with the KPMG member firm in Ecuador:

Alfonso A-Pallete | +1 (212) 954 3852 |

Karina Rubio | +593 (2) 2444 225 |

Bernardo Chaves | +593 (2) 2444225 |

María de Lourdes Ortiz | +593 (2) 2444 225 |

© 2022 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal