26 January 2018 Ecuador approves new Convention to Avoid Double Taxation with Russia The Ecuadorian National Assembly approved the Convention to Avoid Double Taxation and Fiscal Fraud between Ecuador and the Russian Federation. The Ecuadorian Assembly approved the Convention on 14 December 2017, and it was published in the Official Gazette on 12 January 2018. The Convention's provisions apply to each country's income tax, including tax on income derived from the sale of immovable goods. The Convention will allow income to avoid double taxation as follows: - In Ecuador: If an Ecuadorian resident obtains income that is subject to taxation in Russia, such income is exempt from Ecuadorian taxation. If the Ecuadorian resident receives interest, dividends and royalties that could be subject to tax in Russia, the tax paid in Russia can be deducted.
- In Russia: If a Russian resident obtains income that triggers tax in Ecuador, the Russian resident may claim the tax amount paid in Ecuador as a tax credit. The tax credit amount may not exceed the Russian income tax.
Under the Convention, the following income tax withholding rates apply to payments from Ecuador to Russia: Income | % Withholding | Business profits | 0% | Shipping and air transport | 0% | Associated companies (if they agreed upon conditions that would not have been established by independent parties) | 25% | Dividends | 5%/10% | Interest | 10% | Royalties | 10%/15% | Capital gains (for shares, local legislation applies as stated in Art. 13 of the DTT) | 5%/25% | Independent personal services | 0% | Dependent personal services | 0% | Director's fees | 25%/0% | Athletes and artists | 0% | Pensions | 25%/0% | Government service | 25% | Students or interns | 25% | Income from immovable property | 25% | Other income | 0% | For additional information with respect to this Alert, please contact the following: Addvalue Asesores Cia. Ltda., Quito - Javier Salazar
javier.salazar@ec.ey.com - Alex Suárez
alex.suarez@ec.ey.com - Alexis Carrera
alexis.carrera@ec.ey.com
Addvalue Asesores Cia. Ltda., Guayaquil - Carlos Cazar
carlos.cazar@ec.ey.com
Ernst & Young LLP, Latin American Business Center, New York - Ana Mingramm
ana.mingramm@ey.com - Enrique Perez Grovas
enrique.perezgrovas@ey.com - Pablo Wejcman
pablo.wejcman@ey.com
Ernst & Young LLP (United Kingdom), Latin American Business Center, London - Jose Padilla
jpadilla@uk.ey.com
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ATTACHMENT PDF version of this Tax Alert Document ID: 2018-5196 | 
