G/SCM/Q2/ECU/6  
28 April 2022 
(22-3387) Page: 1/2 
Committee on Subsidies and  
Countervailing Measures  Original:  Spanish  
 
  
SUBSIDIES  
REPLIES TO QUESTIONS1 POSED BY THE UNITED STATES  REGARDING  
THE NEW AND FULL NOTIFICATION OF ECUADOR2 
The following communication, dated 26 April 2022 and received on 2 8 April 2022, is being circulated 
at the request of the delegation of Ecuador . 
 
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Ecuador thanks t he United States for its questions regarding our notification.  
 
The replies to these questions are set out below:  
 
Question 1  
 
a. Based on the State Department's Investment Climate Statement, we 
understand that Ecuador passed the Organic Law for Production Incentives 
and Tax Fraud Prevention in December 2014, which includes provisions to 
improve tax stability and lower the income tax rate in the mining  sector. 
Why has Ecuador not notified this program?  
b. We encourage Ecuador to notify this program, if appropriate.  
Reply : 
 
Regarding the first question on the passing, in December 2014, of the Organic Law for Production 
Incentives and Tax Fraud Prevention, w hich includes provisions to improve tax stability and lower 
the income tax rate in the mining sector , Ecuador would like to make the following comments : 
 
This incentive was not created exclusively  for the mining sector; it is also intended for "other secto rs, 
including basic industries" , in accordance with the second paragraph of Article  26 of the 
Organic  Code of Production, Trade and Investment . It is therefore applicable to any type of sector . 
 
Regarding the  lower ing of  the income tax rate in the mining sector , it should be noted  that the 
general income tax rate is 22% pursuant to Article 37 of th e Internal Taxation Law , which was in 
force at the time of the enactment of the Organic Law for Production Incentives and Tax Fraud 
Prevention ; therefore, there is no specific lowering of the income tax rate  for the mining sector. This 
is set out in Article 37 of the Internal Taxation Law, as follows : 
 
"The taxable earnings of  corporations established in Ecuador, as well as of branches of 
foreign corporations domiciled in the country  and permanent establishments of foreign 
corporations not domiciled there, shall be subject to the rate of  22% (…)" 
 
 
1 G/SCM/Q2/ECU/5  
2 G/SCM/N/372/ECU  G/SCM /Q2/ECU/6  
- 2 - 
  It should also be noted  that the income tax rate for the mining sector was clarified  as the  "general 
rate established for corporations" through the Law on the Revitalization of the Economy and the 
Strengthening of Dollarization (published in Official Journal  Supplement  No. 484 of 9  May 2019 ). 
 
In light of the foregoing, it was not considered necessary to notify the above -mention ed Law, since 
(1) tax stability applies to all sectors of the economy and not exclusively to the mining sector; and 
(2) the income tax rate for the mining sector was consistent with the general income tax rat e for 
corporations . 
 
Question 2 
 
a. Based on the State Department's Investment Climate Statement, we 
understand that the Productive Development Law of 2018 enumerates tax 
incentives for new investments and investments in rural or border areas.  
Why has Ecuador  not notified this program?  
b. We encourage Ecuador to notify this program, if appropriate.  
Reply : 
 
Ecuador's response to the second question concerning  the Productive Development Law of 2018 , 
which  enumerates tax incentives for new investments and investments in rural or border areas , is 
as follows : 
 
The second chapter of the Productive Development Law, which set out  the above -mentioned 
incentives, was repealed by the Organic Law for Economic Development and Fiscal Sustainability 
Following the COVID -19 Pan demic (published in Official Journal Supplement No.  406 
of 29 November  2021).  
 
It is therefore unnecessary to notify these incentives, as they are no longer in effect.  
 
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