Ecuador clarifies 15% VAT on online betting and iGaming services

(AsiaGameHub) –   Ecuador has taken steps to eliminate ambiguity around online gambling taxation, confirming that iGaming services are now subject to the nation’s 15% VAT. This clarification is issued by the Servicio de Rentas Internas (SRI), which has laid out how existing tax regulations apply to digital betting and related services.

The new guidance closes the existing regulatory gap by stating that digitally delivered services with minimal human intervention fall within the scope of VAT. This category includes sports betting, prediction platforms, certain paid online games, and subscription-based sports streaming.

VAT rules vary based on where the service operator is located. Domestically operating companies must charge VAT to end users, issue receipts, report and remit VAT in accordance with their regular tax obligations.

If an offshore operator works with a payment intermediary, the payment intermediary will withhold VAT from the transaction and remit the amount to the Ecuadorian government.

If no payment intermediary is involved in the transaction, it is the user’s responsibility to declare and pay VAT on their own. Most users have little to no awareness of this requirement, and complying with this rule presents numerous practical difficulties in real-world scenarios.

Ecuador has not created a new tax through this update; instead, it has introduced stronger controls for an unregulated, fast-growing industry that previously lacked clear regulatory guidance. By bringing online gambling under formal VAT rules, Ecuador has reduced industry uncertainty and aligned the online gambling sector with other industries operating in the digital economy.

Another key feature of this approach is that Ecuador uses payment intermediaries as enforcement agents. By targeting transactions rather than operators, especially those based outside of Ecuador, authorities have adopted a far more pragmatic solution for tax collection.