Ecuador's ISD tax: what companies pay on money leaving the country, and when exports trigger it

A Guayaquil shrimp exporter sells to buyers in Spain and the US and buys feed ingredients from Colombia and Peru. It has no exchange rate to worry about: Ecuador uses the dollar. It does have the ISD, a tax on money leaving the country, which applies to its supplier payments and, under a presumption in the law, to export revenue it leaves abroad too long.

What the ISD is

The Impuesto a la Salida de Divisas taxes transfers, payments and withdrawals of money abroad. Banks withhold it on outgoing transfers. It has been a feature of Ecuador's tax system since 2008, with rates changed several times by law and decree. Check the current rate with the SRI before planning large payments.

Payments abroad

Supplier payments, service fees, loan repayments and dividends to foreign shareholders can all be subject to ISD, unless an exemption applies. Exemptions and credit mechanisms have covered, among others, certain imports of raw materials, inputs and capital goods, and some payments under specific regimes. They change, so check each type of payment.

The export presumption

This is the part exporters most often miss. Ecuadorian law presumes that export proceeds which do not enter Ecuador within the legal period have left the country. That presumption can make them subject to ISD, with exceptions such as amounts used to pay certain foreign costs. An exporter that keeps sales revenue in an account abroad can face the tax as if it had sent the money out.

Ask your accountant how the presumption applies to your exports before holding proceeds abroad.

No exchange rate, still costs

Dollarisation removes exchange risk with the US and makes pricing simple. It does not remove the costs of moving money: international transfer fees, intermediary deductions and the ISD on the way out.

Paying into Ecuador: the local rail

Source: Banco Central del Ecuador: sistema de pagos. Checked when this guide was last updated; the scheme's own page has the current figures.

Where Rivet fits

Rivet does not calculate or withhold ISD. A Rivet business account accepts registered companies after verification, including Ecuadorian companies, and pays out to 120+ countries, including to an Ecuadorian bank to repatriate export proceeds within the deadline. Ecuadorian companies should confirm with their accountant how ISD applies before holding funds abroad. Rivet is not a bank; regulated partner institutions hold the funds.