ECUADOR · TAXES AND TRAVEL
Key Facts
- The country Ecuador, an Andean nation of about 18 million people, uses the US dollar as its currency.
- What happened President Daniel Noboa signed Decree 526 on Thursday 29 October 2026, cutting tourism sales tax to 8%.
- The dates The 8% tourism sales tax applies from Saturday 31 October to Tuesday 3 November 2026, nationwide.
- The old rate The usual rate of the tax, called IVA, is 15%, so a US$100 bill saves US$7.
- Power Index Ecuador ranks 8th of 14 in The Rio Times Latin America Power Index, with 38.2 points (October 2026 edition).
Ecuador has cut its tourism sales tax from 15% to 8% for the four-day holiday from Saturday 31 October to Tuesday 3 November 2026. President Daniel Noboa signed the order on Thursday 29 October.
For US travelers and expats the cut lowers the price of hotels, restaurants and tours in a country that uses the US dollar. It is the latest of several short tax breaks this year meant to keep domestic tourism moving.
What Happened
Decree 526 sets the value-added tax, known in Ecuador as IVA, at 8% for tourism services during the All Souls’ Day and Cuenca Independence holiday. Cuenca is a colonial city in southern Ecuador, and the days covered are Saturday 31 October to Tuesday 3 November.
The decree tells the tax service, called the SRI, to carry out the cut. Tourism businesses must show the 8% rate on every receipt they issue on those four days.
The decree covers the activities defined in Article 5 of the Tourism Law. These include lodging, food and drink outlets, travel agencies, tourist transport including airline tickets, certified guides, event organizers and community tourism centers.
It also covers convention centers and banquet halls, theme parks and fixed attractions, and spas, thermal baths and recreation centers. The Tourism Law requires these businesses to hold a tourism registration and an annual operating license.
Under the Internal Tax Regime Law, the president may cut the tourism rate to 8% on holidays and nearby weekends once the finance ministry agrees. Noboa used that power on 3 to 5 April, 23 to 25 May, 8 to 10 August and 9 to 11 October 2026.
Why It Matters
The tourism sales tax cut is small but visible, because it falls on rooms, meals and tours. On a US$100 bill before tax, the tax drops from US$15 to US$8, so the total falls from US$115 to US$108, about 6% less.
Ecuador uses the US dollar, so American visitors see the full saving with no exchange-rate effect. For the roughly 18 million Ecuadorians, the four days make a long weekend of travel and family visits.
The government says the aim is to encourage trips inside the country, raise spending at tourism businesses and support the recovery of the sector. For small hotels and restaurants, the lower rate is a short-lived push on prices in a slow season.
What It Means for You
If you are traveling in Ecuador over the holiday, ask that your receipt shows 8% and check that the business displays its tourism registration. The decree is not a general tax cut, so shops, supermarkets and other goods that are not tourism services still pay 15%.
The holiday overlaps with a security measure on the coast. Decree 519 sets a midnight to 5 a.m. curfew in five coastal provinces from 1 to 10 November (see our coastal curfew report).
Investors in Ecuadorian tourism and retail should read the tourism sales tax cut as a short stimulus, not a change in tax policy. The standard 15% rate applies again from Wednesday 4 November (see our Ecuador politics explainer for the backdrop).
What Is Not Known
The government has not said how much revenue the tourism sales tax cut will cost the treasury. It has also not said whether more holidays this year, such as the end-of-year break, will get the same cut.
It is not yet clear whether the decree takes effect on signing or on publication in the Official Registry, the government gazette. The decree text does not say how many reduced-rate days remain for this year.
How many hotels, restaurants and tour operators meet the license requirement is unknown. Businesses that lack a valid registration must keep charging 15%, so some customers may see no change in their bill.
More: Ecuador news in English, every day from The Rio Times.
Frequently Asked Questions
What Is the New Sales Tax Rate on Tourism in Ecuador?
The tourism sales tax is 8% from Saturday 31 October to Tuesday 3 November 2026, down from the usual 15%. It applies to services defined in the Tourism Law, nationwide.
Which Services Get the Lower Rate?
Hotels and other lodging, restaurants and bars, travel agencies, tourist transport, certified guides, theme parks, thermal baths and convention halls. The business must hold a tourism registration and an annual operating license.
Does the Cut Apply to Foreign Visitors?
Almost certainly yes, because the decree sets the rate on the service and does not mention who buys it. A visitor from the United States should therefore see the lower rate on a qualifying hotel or restaurant bill, but not on ordinary shop purchases.
Sources: Presidency of Ecuador, Executive Decree 526 on the temporary reduction of IVA for tourism (29 October 2026), 29 October 2026; Internal Revenue Service of Ecuador (SRI), IVA and tourism invoicing rules, 30 October 2026; Executive Decree 513 (29 September 2026), text and legal basis in the Internal Tax Regime Law, 29 September 2026; Executive Decree 519 (15 October 2026), text of the coastal curfew 1 to 10 November, 15 October 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error