Executive Decree 198: VAT increase from 13% to 15% in our neighboring country

Executive Decree No. 198, issued on March 15, 2024 in Ecuador, provides for a major change in the Value Added Tax (IVA). Below are the key details:

- IVA Increase: President Daniel Noboa formalized the decision to increase the IVA rate from 13% to 15%12. This new rate will be effective as of April 1, 2024 and will be applied throughout the year.

In summary, as of April 1, 2024, VAT in Ecuador will be 15%. It is important to be aware of this modification in order to comply with tax obligations!

The implications this has for Foreign Trade are both for importers and exporters to the country

• Exporters: An increase in IVA may result in additional costs for exporters, which reduces their competitiveness in the international market.
• Importers: Importers may experience an increase in the cost of imported goods due to the IVA increase, which could decrease the demand for foreign products.

If you want to know a little more about the decree, in the PDF below you can find it.

Sources:

 Decreto Ejecutivo 198: alza de IVA del 13% al 15% (lexis.com.ec) 

OpenAI. (2024, 3 de abril). A quien afecta el aumento del iva de ecuador en el comercio exterior