Ecuador Tax Agency Announces Assembly Approval of Law on Income Taxation of Dividends

The Ecuadorian Internal Revenue Service Aug. 29 announced the approval of the Organic Law on Social Transparency, introducing reforms to dividend taxation and corporate profit reinvestment as of September 2025. The announcement includes that: 1) a unified 12 percent tax will be withheld on dividend distributions, with rates adjusted to 10 percent for nonresidents, 12 percent for Ecuadorian residents, and 14 percent for entities linked to tax havens or with unreported ownership; 2) an exemption equivalent to three unified basic salaries applies to dividends paid to natural persons residing in Ecuador; and 3) a progressive advance tax on undistributed earnings ...