IVA Drops to 8% on Hotels, Restaurants, and Tours This Weekend — Decree 368 Explained

The Basics

President Daniel Noboa signed Executive Decree 368 on April 27, 2026, temporarily cutting the IVA (Impuesto al Valor Agregado — Ecuador's value-added tax) from 15% to 8% on tourism-related services.

The reduced rate applies during the May Day long weekend: Thursday, April 30 through Sunday, May 3, 2026.

What Qualifies

Under Ecuador's Tourism Law, the following services get the reduced rate:

• Hotels, hostels, and inns — accommodation of any type
• Restaurants and cafés — dining services
• Tourist transportation — including shuttle services and excursions
• Vehicle rentals — car and van hire
• Travel agencies — packaged tours and bookings
• Event organization — congresses, fairs, and tourism-related events

The SRI (Servicio de Rentas Internas — Ecuador's tax authority) has been tasked with implementing the mechanics.

The Math

On a $100 hotel night:

• Normal IVA (15%): $115 total
• Reduced IVA (8%): $108 total
• You save: $7

On a $200 weekend for two at a restaurant:

• Normal: $230
• Reduced: $216
• You save: $14

The savings are modest per transaction, but they add up across a four-day trip covering hotel, meals, and transport.

What This Means for Expats

If you're traveling this weekend, the discount applies automatically — businesses should adjust their billing. Check your receipts to confirm the 8% rate is applied, not 15%.

If you own or operate a tourism business, the SRI expects compliance starting April 30. The government's stated goal is to "dinamizar el turismo interno y fomentar el consumo en este sector" — stimulate domestic tourism and encourage sector spending.

Best value play: The combination of four days off (Decreto 354) plus reduced tourism IVA (Decreto 368) makes this one of the most incentivized domestic travel weekends of the year. Book now if you haven't — hotels in Baños, Montañita, and coastal towns are filling up.

Important note: The reduction is temporary — it expires at the end of May 3. Regular 15% IVA resumes May 4.

Source: El Telégrafo