Ecuador Extends 15% VAT to iGaming Digital Services

Ecuador’s Internal Revenue Service (SRI) has applied the country’s standard 15% VAT to online betting, sports predictions, paid video games and sports streaming services, formalising the treatment of iGaming under the same digital services framework that governs other internet-delivered products.

The measure is contained in Circular No. NAC-DGECCGC26-00000004, issued by the SRI. It defines the scope of taxable digital services as those delivered through the internet or technology platforms requiring minimal human intervention, a definition that captures the core iGaming product stack: sportsbooks, casino platforms, paid gaming services, and associated streaming content.

Obligations Split by Residency

The circular creates two distinct compliance tracks depending on whether an operator is resident or non-resident in Ecuador.

Resident operators must issue sales receipts and are directly responsible for collecting and remitting the 15% VAT to the SRI. The obligation rests with the operator at the point of sale.

Non-resident operators face a more fragmented structure. Where a payment intermediary is involved, that intermediary is responsible for withholding the VAT at the point of transaction and forwarding it to the SRI. The original service provider does not handle the tax directly. Where no intermediary is in place, the obligation shifts to the end user, who must declare and pay the VAT themselves. That user-side obligation creates enforcement uncertainty in practice, since platform-level collection is absent.

Context: Ecuador’s Digital Tax Framework

The iGaming circular sits within a broader digital services tax architecture that Ecuador has been building since 2020, when the SRI first introduced indirect taxes on non-resident digital providers. A law passed in December 2024 overhauled that framework, removing the option to use withholding VAT via non-resident marketplaces or payment aggregators, and instead requiring payment aggregators and marketplaces to remit VAT directly to the SRI and file monthly reports.

The 15% standard VAT rate was confirmed for 2026 in a separate SRI circular, NAC-DGECCGC25-00000006, published in Ecuador’s Official Gazette on 26 December 2025. The iGaming-specific circular now brings betting and gaming explicitly within that framework, eliminating any ambiguity over whether digital gambling services were covered by the broader digital services rules.

Ecuador has no VAT registration threshold. Any operator conducting taxable activity in the country, regardless of transaction volume, falls within scope. Non-resident businesses without a permanent establishment in Ecuador are required to register if conducting B2C digital sales directly to Ecuadorian consumers. B2B cross-border transactions remain subject to reverse charge, meaning the service provider does not need to VAT register for those transactions.

The SRI’s real-time e-invoicing requirements, which took effect on 1 January 2026, apply to registered taxpayers and add a further layer of reporting obligation for operators who are within scope.

Operator Implications

For operators serving Ecuador through payment intermediaries, the immediate compliance requirement falls on those intermediaries rather than the platform itself. That model mirrors approaches taken in other Latin American markets where payment infrastructure is used as the primary tax collection mechanism.

The structural gap is with operators running direct-to-consumer models without local payment intermediaries. In that scenario, user-level declaration is the fallback, a mechanism with limited practical enforceability. The SRI has indicated it will monitor the policy’s impact and issue further guidance on implementation, but no timeline has been specified.

Ecuador is a smaller market than its regional neighbours, but the move signals that governments across Latin America are closing definitional gaps around iGaming’s treatment under digital services tax regimes. Brazil is further along in that process, having opened B2B licensing consultation for suppliers in February 2026 and already operating a structured operator licensing framework. Ecuador’s approach is narrower in scope but consistent with the same regional direction: formalising the tax treatment of digital gambling before comprehensive operator licensing frameworks are in place.

The SRI has not announced an enforcement start date beyond the circular’s publication, and the extent to which non-resident operators will be required to appoint local agents for VAT registration purposes remains to be confirmed through additional guidance.

For operators active in Latin America, the pattern is consistent with what has been seen across the region: markets at varying stages of regulatory maturity are moving to capture iGaming revenue through tax measures ahead of or alongside formal licensing regimes, with the specifics of non-resident compliance obligations still subject to clarification in most jurisdictions.

Source: Ecuador Internal Revenue Service (SRI)