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    Cryptocurrency Tax in Ecuador

    Capital City
    Quito

    Currency
    USD ($)

    Languages Spoken
    Spanish

    Posted by

    Maitreyee Somvanshi
    Market Research Intern, Octaloop |

    In February 2022, Ecuador government stated interest in regulating cryptocurrency and launching its own digital currency. Ecuador is one of the few South American countries with the US dollar as its currency and thus a stable legal tender. It has in the past banned cryptocurrencies but given the latest trends and seeing the benefits crypto holds, it had lifted the ban and permitted transactions of existing crypto currency. Ecuador has fairly low crypto ownership rates with only 2.73% of its population owning crypto.

    Do you have to pay crypto tax in Ecuador? 

    It is unclear if crypto tax in Ecuador is levied or not. Although, according to income tax rules of Ecuador, any income received, from any and all resources are taxable. Therefore, gains from transactions of crypto might be subject to taxes. 

    When do you have to pay tax on crypto in Ecuador?

    If any income is being generated from crypto transactions, then you have to pay taxes on them in Ecuador. 

    What crypto transactions are taxable in Ecuador?

    Selling crypto while making a profit might be taxable. Whether swapping or encashment of crypto is taxable or not, is unclear. 

    Encashment of crypto may be subject to taxes as with appreciation in value, you are making a profit. Swapping might be taxable as it is considered a swap of property and it might be taxable.

    What are the Crypto Tax Rates in Ecuador?

    Taxes in Ecuador on personal income of individuals is levied on a progressive rate of up to 37%.

    Ecuador Income Tax Brackets (2023)

    Taxable income (USD)Tax on excess (%)
    Over 
    00
    11,7225
    14,93510
    18,66612
    22,41815
    32,78320
    43,14725
    53,51230
    63,87635
    103,64437

    Ecuador Capital Gain Tax Rates (2023)

    Capital gains in Ecuador are taxed at a rate of 10%.

    How is Tax Calculated on Cryptocurrency in Ecuador?

    If crypto gains are taxed in Ecuador then there are two way of finding the cost price of your crypto asset in order to calculate the net gain: FIFO and ACB method.

    According to FIFO Method, you sell your oldest acquired coin first and cost is calculated according to the respective prices at which the coin was bought. Whereas, in ACB, time of buying doesnt matter and average cost is taken into account.

    Let’s take an example,

    Say you bought 2 BTC for $ 20,000 in 2020 and 4 BTC for $ 60,000 in 2021. Then you sold 4 BTC in 2022 for $ 1,00,000:

    • FIFO METHOD

    You sell 2 BTC from 2020 and 2 BTC from 2021. So cost price is:

    = 20,000 + (2/4)*60,000

    = $ 50,000 

    Profit = 1,00,000 – 50,000

             = 50,000

    Here, taxes are levied on $ 50,000 .

    • ACB METHOD:

    All coins are of the same denomination. Therefore, cost price for one coin:

    = (20,000 + 60,000)/6

    = $ 13,333 

    So, cost price of 4 coins:

    = $ 53,333 

    Profit = 1,00,000 – 53,333

             = 46,666

    Here, taxes are levied on $ 46,666.

    Crypto Tax in Ecuador – FAQs

    Do you have to pay tax when you buy crypto in Ecuador?

    No, buying crypto is not subject to taxes in Ecuador.

    Do you have to pay tax when you sell crypto in Ecuador?

    Yes, gains from selling crypto might be subject to taxes in Ecuador.

    Do you have to pay tax when transferring crypto in Ecuador?

    No, transferring crypto is not subject to taxes in Ecuador.

    Do you have to pay tax when spending crypto in Ecuador?

    Spending in crypto for goods and services might be subject to taxes in Ecuador.

    Is swapping crypto taxable?

    Swapping crypto for another crypto might be subject to taxes in Ecuador.

    How much tax on crypto gains in Ecuador?

    Taxable income (USD)Tax on excess (%)
    Over 
    00
    11,7225
    14,93510
    18,66612
    22,41815
    32,78320
    43,14725
    53,51230
    63,87635
    103,64437

    Last Updated on April 23rd, 2023 at 7:38 pm
    This information is derived from secondary sources on the web and is subject to change with regulations. This article must not be construed as financial advice and we advise readers to act on this information only after a professional review of their unique circumstances. Binamite is not liable for any loss arising out of the use of this information, directly or indirectly.
    Maitreyee Somvanshi

    Market Research Intern, Octaloop

    Maitreyee takes a keen interest in financial technologies and their potential to transform lives at the grassroots. Put together with her penchant for Economic Research, she brings tonnes of academic and actionable insight into our products. Maitreyee is contributing at Binamite as a Market Research Intern, and when she's not doing that, you can find her exploring the city or buried in a book.