SRI Tax Changes Took Effect March 1 — New Withholding Rates You Should Know About

What Changed on March 1

Ecuador's SRI (Servicio de Rentas Internas) — the country's equivalent of the IRS — implemented new withholding tax rates effective March 1, 2026. If you earn income in Ecuador, receive payments through Ecuadorian entities, or run a business here, these changes affect you.

The Key Changes

Eliminated:

• The previous 2.75% withholding rate has been removed entirely

New rates:

• A 5% tariff replaces the old rate structure in several categories
• A 2% withholding rate now applies to:
  • Credit card payments
  • Insurance and reinsurance payments
  • Leasing payments
  • Construction contracts

Grace period: Companies have until March 31, 2026 to update their accounting systems to the new rates without penalty.

Income Tax Filing Deadlines — This Month

Individual income tax declarations for the 2025 fiscal year are due in March 2026, with specific dates based on the ninth digit of your cédula or RUC:

| 9th Digit | Due Date | |-----------|----------| | 1 | March 10 | | 2 | March 12 | | 3 | March 14 | | 4 | March 16 | | 5 | March 18 | | 6 | March 20 | | 7 | March 22 | | 8 | March 24 | | 9 | March 26 | | 0 | March 28 |

If you have a cédula de identidad (most visa holders do), check the ninth digit. Late filing incurs penalties and interest.

What This Means for Expats

If you're employed in Ecuador or have an Ecuadorian business:

• Your employer or clients will be withholding at the new rates starting March 1
• Check your pay stubs or invoices to confirm the correct rates are being applied
• If you're a freelancer invoicing Ecuadorian clients, discuss the new rates with your contador

If you pay insurance, rent through leasing, or use Ecuadorian credit cards:

• The 2% withholding applies to these transactions
• This doesn't mean you owe 2% more — withholding is a prepayment against your annual tax liability

If you're a US expat with worldwide income:

• Ecuador taxes worldwide income for tax residents (183+ days in the country)
• The SRI changes are separate from your US filing obligations — you still need to file with the IRS
• Consult a cross-border tax professional if you're unsure how Ecuadorian taxes interact with your US obligations

Action item: If you haven't filed your 2025 income tax declaration yet, check your deadline above. If you need a contador (accountant), most charge $30-80 for individual tax preparation.

Sources: Metro Ecuador, LLB Solutions, Teleamazonas