ECUADOR DIGESTIRS limits number of tax-exempt foreign money transfers

Sep 4, 2012 | 0 comments

Ecuador’s IRS has announced it will enforce a limit of two $1,000 transactions per month, per person on money being transferred out of the country. In the past, there was no limit on the number of outflows, mostly in the form of wires, of $1,000 or less, which are exempt from the 5% exit tax imposed in 2009.

The tax office also said that the 5% exit tax will be applied to Ecuadorian credit card accounts for purchases abroad, without the $1,000 exemption.

There is no change to the $ 9,720 limit on funds that travelers can take out the country.
According to IRS director Carlos Carrasco, the new rules will have a limited affect. “The number of people wiring more than $2,000, in $1,000 increments, out of the country each month is very small. We simply want to insure that the system is not abused.”


Ecuador has freed a Belarusian former police inspector who allegedly faced the death penalty in his homeland after uncovering government corruption there.

His case had come under the international spotlight after the decision by Ecuador’s president, Rafael Correa, to grant asylum to Julian Assange after the Wikileaks founder sought refuge in the country’s London embassy. One similarity in both cases was the claim that each faced execution if extradited.

Judge Carlos Ramirez, of the National Court of Justice, in Quito, rejected the extradition request for Aliaksandr Barankov, which accused him of fraud and extortion. The reasons for the ruling have yet to be made public.

Wearing a grey hoodie, Barankov, 30, walked free from Quito’s Garcia Moreno prison on Wednesday afternoon. He made no comment but did give a two-fingered victory sign to waiting photographers. Ecuador’s justice ministry tweeted that he was “in good health” and that his rights had been respected during his time behind bars.

It is the second time Ecuadorian courts have ruled in favour of Barankov, who faced an Interpol arrest warrant but claimed he faced political persecution. Judge Ramirez first blocked the extradition last October, finding the evidence presented by Belarus against him to be inadequate.

Central Bank says Ecuador tax burden is below average 

Ecuadorian tax revenues are below the average collected by other Latin American nations, according to Central Bank statistics. The bank says that in 2011, tax collections amounted to 14.82% of the country's gross domestic product (GDP). “The average of other countries is 20%,” the bank said. "The tax burden on our citizens is one of the lowest in the region.

The bank said it is continuing to work on agreements with other countries to limit the practice of double taxation. Marianela Mendez, consultant to the bank, says the agreements will encourage foreign investment and facilitate the transfer of banking information between countries.

In addition to Andean nation countries, agreements have also been signed with France, Germany, Brazil, Mexico, Canada, Spain, Argentina, Belgium, Chile and Romania.


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