Indirect Tax News - January 2022

President granted authority to reduce the VAT rate for the tourism sector

A law published in Ecuador on 29 November 2021 authorizes the president to issue an executive order that reduces the standard VAT rate from 12% to 8% for persons providing the following tourism services on a regular basis: 

  • Lodging; 
  • Food and beverage services; 
  • Transportation dedicated to tourism activities, including air, maritime and ground transportation, as well as the rental of vehicles for tourism purposes;
  • Where travel agencies provide their own transportation; 
  • Intermediation, tourist service agencies and organizers of congress and convention events; and, 
  • Racetracks and amusement parks. 

The VAT rate reduction may be applicable for up to a maximum of 12 days per year, during holidays, weekends, and at the national or regional level. 

Nelson Morales