ECUADOR Trends and Developments Contributed by: Diego Almeida-Guzmán, Andrés Álvarez-Toapanta, Cesar Molina-Delgado and Ignacio Jijón-Chiriboga, Almeida Guzmán & Asociados
Colombian countermeasures and regional challenge Colombia responded by imposing a similar surcharge on a designated group of Ecuadorian products. Addi - tionally, Colombia challenged Ecuador’s measure before the Andean Community of Nations ( Comuni- dad Andina de Naciones ), of which both Ecuador and Colombia are member states. Pending developments The outcome of Colombia’s challenge, any provisional measures or interim relief that may be ordered by the Andean Community Secretary, the effective collection and enforcement of these surcharges by each state, and their material impact on bilateral trade between the two nations will be determined during the first half of 2026. These proceedings bear close monitoring given their potential implications for Andean regional integration and bilateral commercial relations.
Tax Convention. Accordingly, business profits earned in Ecuador by a tax resident of the United Kingdom are not subject to the 25% income tax withholding (the general rate for taxable outbound payments from Ecuador). Among other relevant provisions, the tax treaty estab - lishes a 10% tax rate on the gross amount of interest and royalties paid from one contracting state to the other. With respect to dividends, applicable tax rates on payments from one state to the other range from 5% to 15%, depending on the beneficial owners and other specific conditions. Diplomatic Tensions Between Ecuador and Colombia Resulting in Increased Foreign Trade Levies Background and Ecuador’s justification In early 2026, Ecuadorian President Daniel Noboa asserted that the Colombian government was failing to ensure adequate cross-border security, alleging that a substantial quantity of narcotics exported from Ecuador to destinations including the United States and Europe enters Ecuadorian territory from its north - ern neighbour. Additionally, President Noboa cited a trade deficit of USD1 billion in Ecuador’s bilateral commerce with Colombia. Imposition of customs security surcharge In response to these concerns, Ecuador established what it has characterised as a “security fee for cus - toms control” ( tasa de seguridad por control aduanero ) applicable to all goods entering Ecuador from Colom - bia, effective 1 February 2026. According to the formal statement of purpose issued by the Ecuadorian gov - ernment, the primary objective of this measure is to strengthen customs control mechanisms and enhance national security. The surcharge is assessed at 30% of the customs value of imported goods and is payable to the Ecuadorian IRS.
155 CHAMBERS.COM
Powered by FlippingBook