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Research by Country/Region January 19, 2018  
ECUADOR: CUSTOMS, TAXES, and DOCUMENTATION REQUIREMENTS: IT PRODUCTS and SERVICES IMPORTS

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A. Is this country a member of the Information Technology Agreement?

B. Customs documentation requirements for IT products

C. Software: duties and taxes, updates, licenses, electronically delivered

D. IT services: tax treatment and other regulations

E. Refurbished, used, or repaired computer equipment imports


A. IS THIS COUNTRY A MEMBER OF THE INFORMATION TECHNOLOGY AGREEMENT?
NO
Signatories to the Information Technology Agreement (ITA) have eliminated their import duties on a wide range of information technology products, including software and computer hardware. For more information on the ITA, and exact tariff elimination schedules of signatories, click here.
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B. CUSTOMS DOCUMENTATION REQUIREMENTS FOR IT PRODUCTS

What are the documentation requirements for the physical import of software? For other information technology products?
The following documentation is required:
-import permit (Dui-Documento Unico de Importacion)
-import number assigned by the central bank
-income tax registry number issued by the Ecuadorian IRS
-original commercial invoice
-bill of lading
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C. SOFTWARE: DUTIES and TAXES, UPDATES, LICENSES, ELECTRONICALLY DELIVERED

DUTIES AND TAXES ON SOFTWARE IMPORTS

Are duties assessed on the intellectual property of the software or on the medium on which is it presented?
Duties are assessed on the medium on which the software is presented (ie. CD, diskette, etc.). Import duties are charged on the CIF value (in this case, the cost is the cost of medium) of the merchandise.

Are taxes assessed on the intellectual property of the software or on the medium on which is it presented?
Taxes are assessed on the medium on which the software is presented. These taxes are:
-12% Value Added Tax
-0.25 per thousand per each USD 1,000 of the FOB import for the Export and Investment Promotion Corporation (CORPEI)
-0.5% for the Children’s Development Fund.

Taxes are charged on the CIF value (in this case, the cost is the cost of medium) of the merchandise.

Is customized software treated differently than packaged software?
No, for import/tax application, customized and packaged software are treated the same.
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IMPORTS OF SOFTWARE UPDATES

What are the customs duties and tax implications for software sold with updates when the full sales price, including cost of updates, is shown on the original commercial invoice? Are duties and taxes paid on that amount? What happens when the updates are sent at a later date? Are duties/taxes applied again? If so, based on what value?
When the software package comes with updates, these are considered part of the package, and import duties and taxes are applied on the full sales price of the software including the cost of updates indicated in the commercial invoice. When an update is sent separately, duties and taxes are applied again on the declared CIF value of the update.

How should information presented on the commercial invoice for the original and subsequent shipments to avoid paying duties/taxes more than once on a single sale?
The information required is the same as every time an update is imported separately from the original package, it is considered a new import and duties/taxes must be paid again on the update.
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SOFTWARE LICENSES: CUSTOMS CLASSIFICATION, IMPORT DUTIES, TAXES, OTHER

Are software licenses classified in Harmonized System 4907?
Yes.

Are import duties/taxes applied? If so, on what cost/price base are they levied?
Yes. If the license is not included in the software package, the duties will be charged on the CIF value of the license declared on the commercial invoice. If the license is included on the software package, the charges are applied on the CIF value of the software package.

Are withholding or other additional taxes applied on software licenses? If yes, how?
No.

If a U.S. license agreement is included in the packaging or is part of the installation/registration of shrink-wrapped software imported from the United States, would that agreement be binding on consumers in your market? If so, would U.S. or local laws pertain?
Yes, it would be binding. Local laws apply.
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SOFTWARE DELIVERED OVER THE INTERNET/ELECTRONICALLY DELIVERED SOFTWARE

Are taxes applied to software delivered to the end-user over the Internet? If so, on what value?
At the present time, there are no import duties/taxes charged when software is delivered over the Internet. However, this may change in the future as a new e-commerce law has been issued and pertinent regulations are being established. Under this context, customs duties may be charged on Internet transactions.

What are the documentation requirements for the electronically delivered import of digitized products (i.e. software, movie downloads) over the Internet or other networks?
At the present time, there are no import duties/taxes charged when software is delivered over the Internet, and thus no documentation requirements. However, this may change in the future as a new e-commerce law has been issued and pertinent regulations are being established. Under this context, customs duties may be charged on Internet transactions.

Must an electronically delivered software import be accompanied by a physical shipment of the same product?
To date, the Ecuadorian customs authority does not require a physical medium when the import comes over Internet. However, procedures may change in the future when the new e-commerce law and pertinent regulations are implemented. See above.
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D. IT SERVICES: TAX TREATMENT AND OTHER REGULATIONS

Are services (i.e. training, set-up, etc) relating to the sale of software taxed? If so, at what rate and based on what value?
Yes. Taxes are applied on the full amount of the service contract. These include:
-12% Value Added Tax

Are U.S. IT solution providers permitted to send personnel into the country to set up hardware/software-related systems?
Yes.

Are special visa, work permits, and/or professional certification by an accredited body required?
American citizens are allowed to stay in Ecuador 3 months without a specific visa. After this period of time, a work permit is required.
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E. REFURBISHED, USED, OR REPAIRED COMPUTER EQUIPMENT IMPORTS

1. REFURBISHED COMPUTER EQUIPMENT
Is the import of refurbished computer hardware, parts, and accessories (including toner cartridges) permitted?
Yes.

If so, what are the documentation requirements?
-import license (Dui-Documento Unico de Importacion)
-import number assigned by the Central Bank
-income tax registry number issued by the Ecuadorian IRS
-original commercial invoice
-bill of lading

Is special labeling required?
The Ecuadorian Standards Institute sets labeling requirements.
-labeling must indicate “refurbished”
-name of the company
-address
-country of origin
-unit
-net weight

For additional information please contact the following government agency:
Instituto Ecuatoriano de Normalizacion
Casilla 17-01-3999
Baquerizo Moreno e8-29 y Diego de Almagro
Quito, Ecuador.
e-mail: inen1@inen.gov.ec
web site: http:///www.inen.gov.ec

What value should be shown on the invoice?
Listed value of each refurbished item and total CIF commercial value of the importation.

How are duties and taxes assessed?
Duties/taxes are charged on the declared CIF value of the merchandise.
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2. USED COMPUTER EQUIPMENT
Is the import of used computer hardware, parts, and accessories (including toner cartridges) permitted?
Yes. Answers are the same as for refurbished computer equipment.. See answers in section E.1. above.
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3. REPAIRED COMPUTER EQUIPMENT
Are duties and taxes assessed on the re-import of repaired computer equipment?
Yes. According to Ecuadorian import regulations, when merchandise is temporarily exported for repair, applicable import duties are charged on the aggregated value, new or reconditioned replacement parts only.

How should the commercial invoice appear?
The commercial invoice should state the CIF value of the new or repaired part value.
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RESPONSE INFORMATION

This response was prepared by the U.S. Department of Commerce/Commercial Service in Quito, Ecuador, in February 2003. For further clarification please contact:
Nadya Ordonez
Commercial Advisor
U.S. Embassy, Quito
nadya.ordonez@mail.doc.gov

Special Notes: The above information is intended to serve only as unofficial guidance. In seeking to obtain government rulings in specific cases, it will often be necessary to refer to special laws, separate regulations and announcements, and case-by-case decisions by the government. Beyond the general guidelines shown above, legal counsel should be retained at an early stage of consummation of a major procurement contract, and before entering into any legal commitments.

Approved by Bobby for 508 compliancy, you do not need to have this image on your web pages!! This page was last updated on 08/28/2003. This site is operated by the Office of Technology and Electronic Commerce (OTEC) division of the International Trade Administration, U.S. Department of Commerce.

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