Sports betting tax is effective from July 1, 2024 – 2024-07-14 17:39:26

by times news cr

2024-07-14 17:39:26

Starting July 1, 2024, Ecuador will implement the Single Income Tax on income received by sports betting operators, both residents and non-residents in the country. This measure is part of the Organic Decree Law for the Strengthening of the Family Economy, published in the supplement of the Official Registry 335 on June 20, 2023.

The new tax, which levies a 15% rate on the income of sports betting operators, allows them to deduct prizes paid from their income, provided that the respective withholding tax has been made. In addition, players’ prizes will also be subject to 15% income tax, which will be withheld and paid to the treasury by the operators.

The regulations accompanying this tax regime specify the mechanisms for declaring, settling and paying the tax, as well as the corresponding tax obligations.

Requirements for Foreign Operators

Foreign companies engaged in sports forecasting and operating in Ecuador must meet the following requirements:

  1. Register in the Single Taxpayers Registry (RUC).
  2. Provide tax information to the SRI in accordance with regulations.
  3. Declare and pay the Single Income Tax for Sports Forecast Operators.
  4. Appoint a representative residing in Ecuador for all purposes arising from the administration of the tax.

In case of non-compliance, the IP address of the company’s website will be blocked and a penalty of up to 30 basic salaries will be imposed.

President Daniel Noboa, through Executive Decree 313, has issued the regulations for the collection of the Single Income Tax from sports forecast operators.

Growth of the Sports Predictions Sector

Since 2020, sports betting operators have experienced significant growth, benefiting various industries such as marketing, media, and soccer teams. According to the SRI, the income of the six platforms domiciled in Ecuador increased from $2.5 million to $37.4 million in the last four years, with a tax payment of close to $500,000.

However, there are no accurate records of the income of foreign companies operating without residency in the country. The new tax and the established requirements seek to formalize all companies in Ecuador, ensuring tax payment and income transparency.

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