The Internal Revenue Service (SRI) of Ecuador has announced the implementation of new withholding tax rates effective from March 1, 2026. This change includes the qualification of new withholding agents and adjustments to various income categories. Notably, the tax brackets will still range from 0% to 10%, but the previous rate of 2.75% has been eliminated and replaced with a 5% rate. The system will adapt to these changes, allowing taxpayers to issue withholding receipts until the end of March without facing penalties.

According to the resolution NAC-DGERCGC26-00000009, the adjustments not only refine existing tax rates but also reshape the classifications to which these rates apply. For instance, services provided by natural persons where labor predominates over intellectual input will see their withholding rate increased from 2% to 3%. Additionally, what previously was taxed at 3% will now incur a higher withholding of 5%. This reclassification aims to better align tax obligations with the nature of the income generated.

As taxpayers adjust to the new rules, the SRI aims to ensure that all necessary changes will be implemented smoothly and that individuals and businesses can comply without immediate penalties. By issuing receipts until the end of the month, it allows for a transitional period to facilitate the adaptation to these new regulations, which are set to have a significant impact on tax revenue collection in the coming years.