Ecuador

In Ecuador, cryptocurrencies are defined as virtual digital assets or payment instruments but are explicitly not legal tender. Despite this, the country maintains a regulated environment, establishing a clear framework for licensed cryptocurrency businesses, known as Virtual Asset Service Providers (VASPs), to offer trading, custody, payments, and tokenization services. The Servicio de Rentas Internas (SRI), Ecuador's Internal Revenue Service, governs cryptocurrency taxation. This is primarily established under the Código Orgánico Monetario y Financiero (Organic Monetary and Financial Code), Article 94, and supported by Central Bank statements and subsequent regulatory guidance issued from 2022 onwards, alongside AML/CFT regulations. For individual investors, gains from cryptocurrency sales are generally treated as ordinary income and are subject to a flat tax rate of 22%. This 22% rate applies to capital gains, meaning there is no preferential tax treatment or different rate based on how long you hold an asset, short-term and long-term gains are taxed identically. Converting cryptocurrency to fiat currency, like the US Dollar, is a taxable event, with gains or losses calculated from the difference between the sale proceeds and the initial cost. Similarly, swapping one cryptocurrency for another also triggers a taxable event, requiring the recognition of gain or loss on the crypto being exchanged. There are no identified exemption thresholds for these activities, tax applies to the net profit. Licensed corporate entities engaged in crypto activities also face a 22% corporate income tax on their net profits. Core VASP services typically benefit from a 0% Value Added Tax (VAT), while certain ancillary digital services may be subject to a 12% VAT. Specific crypto activities are treated as follows: Staking income for licensed entities is taxed as ordinary business income at the 22% corporate rate, but treatment for individuals is less clear. Cryptocurrency mining has been legal since 2025, taxed as business income at 22%, with deductible equipment and energy costs, provided operations comply with renewable energy requirements. For Decentralized Finance (DeFi) activities like yield farming or liquidity pools, and Non-Fungible Tokens (NFTs), there is no specific formal guidance. These are generally expected to be taxed as ordinary business income under general principles, with NFTs potentially treated as property or income based on context. Ecuador's regulatory landscape continues to evolve. In January 2022, the Central Bank announced the need for official regulation of digital assets, with a comprehensive law anticipated to provide clarity. Mining regulations were solidified in 2023. These ongoing developments aim to further refine the framework for digital asset use and investor protection.