The Internal Revenue Service (SRI) of Ecuador has begun oversight actions to ensure the collection of the Single Income Tax (IRU) on profits from the sale of shares. This initiative is part of President Daniel Noboa’s fiscal policy, which aims to reduce tax noncompliance and strengthen public finances.
The SRI’s efforts are mainly focused on wealthy business owners with significant shareholdings. Audits have already started in several cases, requiring taxpayers to go through the necessary procedures to declare and pay their dues.
The IRU imposes a 10% tax on profits made from transferring shares, meaning the gain shareholders receive when selling their company stocks. While about 300 taxpayers have voluntarily complied with this obligation—resulting in an average annual collection of USD 30 million—the SRI has identified around 6,000 potential taxpayers who have not yet declared this tax. These undeclared cases could bring in an estimated USD 50 million this year.
Additionally, according to SRI data, there are currently more than USD 29 billion in undistributed dividends among shareholders in Ecuador. The agency is increasing its monitoring to ensure proper taxation on these dividends.
To support these efforts, the SRI and the Superintendency of Companies will renew their inter-institutional cooperation agreement. Previous administrations had discontinued this agreement, but it will now be used to share information and identify cases of omission or underreporting.
The SRI reminds taxpayers that “the Comprehensive Penal Code establishes that any act of simulation, concealment, falsification or deception that misleads the Tax Administration constitutes crimes punishable by up to 10 years in prison.”
“The SRI will continue executing actions within its Control Plan to attack, report and sanction fraudulent behaviors by high-net-worth taxpayers who hide the real value of their shares to avoid paying taxes owed,” stated the agency.
