The Organic Law for the application of the Popular Consultation of 02/19/2017, has included a reform to the Internal Tax Regime Law related to the conditions for a Country, Regime or Jurisdiction, to be considered as Tax Heaven, Preferential Tax Regime or Jurisdiction of lower taxation.

This reform indicates that it will be considered as tax havens those regimes or jurisdictions in which at least two of the following conditions are met:

1. Have an effective income tax rate or taxes of the same or similar nature less than 60% to which corresponds in Ecuador or that said rate is unknown.
2. Allow the exercise of economic, financial, productive or commercial activities to not been develop substantially within the respective jurisdiction or regime, in order to benefit from tax benefits specific to the jurisdiction or regime.
3. Lack of effective exchange of information in accordance with international standards of transparency, such as availability and access to information by the competent authorities on the ownership of companies, including legal owners and beneficial owners, reliable accounting records and information of bank accounts, as well as the existence of mechanisms that imply an effective exchange of information.

Exclusively with tax effects, this provision will apply even if the jurisdiction or the regime examined is not expressly included in the list of tax havens issued by the Internal Revenue Service.

The Internal Revenue Service may include or exclude jurisdictions or regimes in the list referred to in the previous subsection, provided that it verifies the provisions of this article regarding the compliance or not of two of the three conditions.