In a circular signed on March 31, 2026, Ecuador’s Servicio de Rentas Internas (SRI) clarified that betting-related content, sports prediction services, paid online games, and sports event streaming provided as part of a contracted digital service are taxable under VAT at the general rate of 15%. The agency linked this classification to Ecuador’s overall digital services regime, which applies to internet-based services that operate on an automatic basis and entail little human intervention. The applicable VAT rate is the standard 15%.
VAT Liability Now Follows the Payment Flow
What makes the guidance notable from a business perspective is the collection logic. Ecuador is not applying the same rules for each operator. Rather, the responsibility to pay taxes is linked to the payment chain. Whenever a non-resident platform receives payment via a local intermediary (a bank or card issuer), the local financial intermediary must withhold 100% of the VAT at the point of payment.
Resident Platforms Face Compliance Duties
The rule is more straightforward for the providers resident in Ecuador. A local company must issue sales documents, pass VAT on to the end customer, and comply with filing and payment obligations. In the hypothetical scenario involving sports predictions set out by the regulator, resident platforms must aggregate all deposits made by a player each month, generate one monthly invoice per user, and include the 15% VAT charge in that billing.
This latter is probably the hardest one from a practical standpoint. If the service provider is non-resident and there is no intermediary involved in payments, the Ecuador-based customer will assume the role of the taxpayer. When that happens, the user must issue the corresponding purchase settlement, self-assess the VAT, and declare and pay it to the SRI.
Although it closes a compliance gap, it also poses a challenge for effective enforcement. Tax declarations made by users are more difficult to check than a deduction made by a bank or charged by the local service provider.
A Broader Push to Formalize the Sector
The SRI already has a dedicated framework for administering the single income tax on sports prediction operators. The system took effect as of July 1, 2024, with separate registration and compliance steps for non-residents operating through an Ecuador-based representative. The VAT circular, therefore, does not appear as a standalone tax directive but as one of the steps towards establishing the perimeter of taxation.
Now, Ecuador is past general assertions that digital betting should be taxable. It is now pinpointing where taxes will be collected and who is responsible at what stage. Such a system should give the tax authority more direct control over collection points. At the same time, it’s putting additional pressure on operators and payment partners to think harder about how their transactions in Ecuador are handled.
