Income Taxes in Ecuador, How Much?

The income tax system in Ecuador is pretty straightforward, unlike in the USA where Trump is starting to forego releasing his taxes and making it burden on many.

Every March everyone involved in commercial activity pays income tax “impuesto a la renta” based on the previous calendar year.

If you have a tax ID number “RUC” you will be liable for paying taxes, whether you be a sole proprietor or representing a corporation.

In Ecuador, as in the US, they use a sliding scale taxing a percentage of your earnings based on how much you earn.

In 2010, if you earned…

up to $8910…you pay $0 tax
$8910-11350…you pay 5% tax
$11350-14190…you pay $122+ 10% tax
$14190-17030… you pay $406+ 12% tax
$17030-34060… you pay $747+ 15% tax
$34060-51080… you pay $3301+ 20% tax
$51080-68110… you pay $6705+ 25% tax
$68110-90810… you pay $10963+ 30% tax
$90810-and up… you pay $17773+ 35% tax

You can legally deduct housing costs, health costs, clothing costs, food costs, and education costs with the proper, original receipts “facturas”.

If you are an employee, your only tax liability is the table stated above. If you own a business, in addition to the above income tax based off of earnings or profits “impuesto a la renta” you will have to pay an additional sales tax “IVA”, which is 12% of the total gross sales of your business.

Now, for all your business expenses in which you incurred paying sales tax yourself, you can write off that sales tax paid against the sales tax you owe, and pay the difference.

In Ecuador, if your gross sales are over $60000 in 1 year, you are required by law to keep detailed records of your accounting and affiliate yourself with the public organization called the IESS.

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The Crisis Effect on Ecuador Real Estate

Foreclosures, defaults, fire sales…

We all know the story of the housing market north of the border, but has the crisis had the same affect on real estate in Latin America?

An important question, indeed, for anyone staring out their frosty window with a sore throat dreaming of their big leap south.

After investigating the housing market in several Latin countries, the best answer I can give you is “it depends.”

I know what you’re thinking. “It depends.” What a nice, safe cop out.

But it’s true. Let me explain. It is a little more complicated down here.

First and foremost, the Latin market has not had across the board drops in prices as seen in the US and Europe.

In Latin America, it has depended on the country, your location within the country, and the type of property you own.

For example, for a rather undiscovered, under-priced country like Ecuador, the crisis has actually increased demand in some areas by as much as 20-30%.

According to one owner of a prominent real estate website in Ecuador wishing not to be revealed, said that traffic arriving from Google nearly doubled as the crisis intensified in the last quarter of 2008 and the first quarter of 2009.

His theory is that with the crisis up North, more and more people have begun to look for cheaper places to reside, and with new technologies like the internet and Skype, many people can continue to work from remote locations.

Whereas in the Dominican Republic, a country that has already experienced a recent market boom, the consensus from local agents seems to be that prices have taken a noticeable drop in the touristy, foreigner-dependent areas like Punta Cana, but in less touristy places like Santo Domingo, the prices have remained relatively stagnant through the crisis.

Although, even in the touristy places, prices have not fallen as much as they have in the US.

Which brings me to my next point: your actual location is also important. One of the main factors people look for when moving to Latin America is security.

This may be the reason why prices for properties in gated communities and posh condo buildings have not felt the effects of the low market as much compared to similar properties located outside guarded areas.

Another important observation is that in both countries, Ecuador and the Dominican Republic, prices of beachfront property have not gone down. For beachfront, they rarely do.

One possible reason for the softer impact of the crisis on the housing market of Latin America is that, let’s face it, the traditional investors in Latin America have been the world’s rich, and the rich have not been nearly as affected by the world economic crisis as the middle class.

Another important observation is that credit has always been expensive in Latin America, so people, foreign and local, normally buy in cash, minimizing the affect of the credit crunch as well.

With that understood, with a little due diligence, there is no better time than now to start taking a gander south of the border.

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Part 2 of 2: Moving to Ecuador on a Budget

This article is continued from part 1…

Then, to get around, I recommend not buying a car, that way you don’t have to spend on parking, repairs, gas and insurance. Instead, learn to use the local bus system and the trolley, both of which charge a modest $.25 per ride.

For communicating, buy a cheap used phone on the street for $20, a sim card, and just go on the prepaid system. Buy cards to put credit on your phone and learn to communicate with people like the locals do in countries where cell phone calls are expensive, via text messages.

For internet, you could find free WIFI hot spots to get online with your laptop. Most luxury hotels offer a free signal in their lobby or up-scale restaurants and cafes often do too.

For calls home back to the States, learn to use Skype, teach your mother or father how to use it before leaving, then set times to be connected via email (remember to take a microphone from the States to plug into your laptop).

Following these tips you could live in Ecuador for under $1000 a month, even in 2011!

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Moving to Ecuador on a Budget: Part 1 of 2

Yes, Ecuador is cheap, but it depends a lot on how you play the game.

For someone who wants to move to Ecuador without a large pension or nest egg, here is what needs to be done.

First for your relocation, we suggest you to go for house removal service singapore, since they have a team of well trained surveyors to handle any moving case to offer assurance and peace of mind with the highest service standards.

Then, look for cheap flights to Ecuador, the cheapest are from Miami and New York. During the low seasons (May to November) you can find flights starting for around $350 round trip.

Next, know what to bring down.

Clothing and electronics are more expensive down here in Ecuador so bring down everything you will need in that regard…digital camera, laptop, dress clothes and shoes, etc.

Once in Ecuador, don’t spend a lot of time in hotels. But DONT look for long term rentals online either! Once you are there, hire the reliable best removalists sydney to help you with your things.

Come to Ecuador first, stay in a hotel, then once here on the ground, get to work on finding a place to rent.

You don’t want to agree to a long term rental (and even send a deposit) before you see the place and the surrounding area (I have been burned like this).

Then, once in Ecuador in a cheap hotel you found on hostelworld.com, buy the local paper (in Quito it is El Comercio). Check the classifieds for rentals, and solicit assistance from a local friend or the receptionist of your hotel when calling the ads in the paper (for language help).

Looking for rentals in this way, you could find a room in an apartment starting around $150/month or a small suite-apartment starting around $350/month. In the small towns it is even cheaper to rent. If you need extra space for your belongings consider looking into a self storage facility.

Then, once you find a place to stay, locate the nearest supermarket and grocery shop. Cooking can save you several hundred dollars a month on food and is healthier than always eating in the street.

If you don’t know how to cook or don’t want to, I recommend eating heavy during lunch, when you can buy a plate lunch in Ecuador for $2, and eat light snacks for breakfast and dinner.

Then, to get around… please see part 2 of this article when published in a couple days, thanks…

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How to Find Organic Products in Ecuador

Finding organic products can be a trip in Ecuador, here are a few tips to find some commonly sought after organic products…

Chia seeds _ “semillas molidas” full 500 gm $12,00
Contact to acquire: Jose Trujillo, telf. 04 2 22 19 76 Guayaquil… jgregortrujillo1 at hotmail.com

The chia that Jose sells is 100% organic, the farm that grows the seeds is on the coast of Ecuador, near Salinas…if u write him he can sell you some, although he usually just exports due to lack of local demand…

Goji Berries, people do not consume in Ecuador..but
this contact can get the goji.. Andres Muñoz telf.086710948 / 092589980 cacaroto77 at hotmail.com

Acai berries, 120 liquid capules of 1000 mmg each one $ 34,00
Andres Muñoz telf.086710948 / 092589980 Guayaquil cacaroto77 at hotmail.com

Chemical free laundry detergent- Supermaxi brand OZZ, detergent of 1kg $4.50
After a lot of looking the only one I found that works for you is this generic one in the sumpermarket stores Supermaxi…

Chemical free laundry dishwashing detergent- Supermaxi brand OZZ, liquid of 200gm $ 2,80
After a lot of looking the only one I found that works for you is this generic one in the sumpermarket stores Supermaxi…

Organic coconut Oil.. www.amazon.com
Can not find in Ecuador, but can buy in amazon.com and I have been told by friends that the products do and can arrive to Ecuador.

Bicarbonation of sodium.- 10gm $ 0,50
Can find in any drugstore “farmacia” in the street!

Organic Shop Store .-If you would like organic products a great store is right in front of the China embassy in Quito = Address: Av. Atahualpa 349 y Av. Amazonas, Quito, Ecuador

Another good organic store is… Cooperativa Zapallo Verde. Address.- La Casa del Árbol
Lugo y Vizcaya (esq) – La Floresta (My son and I live close to here.)
zapalloverde at gmail.com
telf. 600-6275 (only on wednesdays)
Supermaxi is a big box store in many parts of Ecuador where you can find many organic products

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