Income tax on rent, worked example, in Ecuador

December 29, 2015

Non-resident couple´s joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income 18,000 72,000 144,000
= Taxable Income 18,000 72,000 144,000
Income Tax Rates2
Flat Rate 25% 4,500 18,000 36,000
Annual Income Tax Due US$4,500 US$18,000 US$36,000
Tax Due as % of Gross Income 22% 22% 22%
Thanks to:
Moores

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 17, 2007.

Notes


1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner).

2 Non-residents are taxed at a flat rate of 25%.






NON-RESIDENT COUPLE (THROUGH A LOCAL CORPORATION)

Non-resident couple´s joint monthly rental income1 US$1,500 US$6,000 US$12,000
Annual Rental Income 18,000 72,000 144,000
Less Costs2 (3,000) (4,500) (6,200)
Less Depreciation Expense3 (6,000) (20,000) (48,000)
= Taxable Income US$9,000 US$47,500 US$89,800
Corporate Tax Rates4
Flat Rate 25% 2,250 11,875 22,450
Annual Income Tax Due US$2,250 US$11,875 US$22,450
Tax Due as % of Gross Income 12.50% 16.49% 15.59%
Thanks to:
Moores CIA. LTDA.

DISCLAIMER: The information contained above is marketing material only and is not written tax advice directed at the particular facts and circumstances of any person and should not be relied upon. We encourage you to discuss your particular situation with us or an independent tax advisor. This information was last updated on July 17, 2007.

Notes


1 The property is jointly owned by husband and wife, through a local corporation.

2 Estimated values. Income-generating costs are all deductible.

3 Estimated values.

4 Corporations are taxed at a flat rate of 25%. Gross income from lease transactions is subject to 8% withholding tax. This tax is deductible against income tax liability.

      

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