Ecuador
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INDIVIDUAL TAXATION
Residents are taxed on their worldwide income. Married couples are taxed separately.
INCOME TAX
Income is taxed at progressive rates. Expenses and costs incurred in obtaining, maintaining, and preserving the revenues subject to the tax are deductible.
INCOME TAX |
|
| TAXABLE INCOME, US$ | |
| Up to US$7,850 | |
| US$7,850 - US$10,000 | |
| US$10,000 - US$12,500 | |
| US$12,500 - US$15,000 | |
| US$15,000 - US$30,000 | |
| US$30,000 - US$45,000 | |
| US$45,000 - US$60,000 | |
| US$60,000 - US$80,000 | |
| Over US$80,000 | |
| Source: Global Property Guide | |
There are no special deductions with regards to the number of children, marital status, age, etc.
Exemptions are applicable to individuals receiving salaries. These exemptions include: dividends, additional benefits, and profit sharing.
RENTAL INCOME
Rental income earned by residents is taxed at progressive income tax rates. Taxable income is computed by deducting the following from the gross rent: interest expense, insurance premiums, taxes and fees charged on the property, depreciation allowance calculated on the property’s cadastral value and 1% of the property’s cadastral value as estimated maintenance expenses.
Itemized extraordinary expenses are deductible only if with permission from the tax authorities.
CAPITAL GAINS
Capital gains on the occasional sale of real property are exempt from income tax.
PROPERTY TAX
Municipal Property Tax (impuesto de propiedad de bienes inmuebles or impuesto a los predios urbanos)
Municipal property tax is levied on land and buildings based on official appraisals reflecting the property’s commercial sale value or the cadastral value. The tax rates are progressive from 0.025% to 0.5%, varying annually in order to cope with inflation.
Allowable deductions are mortgage loans for the acquisition, construction or improvement of the property between 20% and 40% of the principal but it must not be more than 50% of the property’s cadastral value. This deduction is available upon request.
Property taxes are deductible for business income tax purposes.
Ecuador - more data and information
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