Question About 5% Penalty for Removing Money From Ecuador

Yes.

Here are some links where the issue was discussed a few years back.

First, the Ecuador tax regulation run through google translate, pertinent wording just below the illustration of the tax form -

http://translate.google.com/translate?h … 6bih%3D626

And an older expatblog thread where the matter was previously aired -
"Sending money home from Ecuador"
https://www.expat.com/forum/viewtopic.php?id=309736

Shame MariaPia doesn't seem to post anymore. She was very helpful.

gardener1 wrote:

Yes.

Here are some links where the issue was discussed a few years back.

First, the Ecuador tax regulation run through google translate, pertinent wording just below the illustration of the tax form -

http://translate.google.com/translate?h … 6bih%3D626

And an older expatblog thread where the matter was previously aired -
"Sending money home from Ecuador"
https://www.expat.com/forum/viewtopic.php?id=309736

Shame MariaPia doesn't seem to post anymore. She was very helpful.

Thanks. Good information in that thread.

Would you happen to know if one can circumvent the 5% by:

1) Withdrawing 10K and carrying it out of the country (someone suggested something like this in that thread)?

2) Making a purchase with your Ecuador bank card (e.g. costco.com or amazon.com...possible?)  for an expensive item and shipping it to your US address?

3) "Uploading" money into an online wallet like Skrill, Webpay, Netteller, etc. and then withdrawing it to a bank in another country?

As I understood from discussion at that time, an account holder could withdraw no more than a total of $3000 in one month, in increments of not more than $1,000 per withdrawal, without incurring the 5% penalty. So it would take 3 transactions in one month to get the $3,000.

To withdraw a total of $15,000 and not pay the 5% tax, it would take five months of 3 structured bank withdrawals per month to get the whole amount.

I don't think it matters where you put the money once it is taken out of an Ecuadoran bank account, it is the removal from the bank account that triggers the tax.

One more item of note. Bank cards have Interac limits usually around $1500, so no purchases larger than that at places like Costco etc and the bank transaction fees are ridiculous. I paid $16 to withdraw just over $100USD from a bank machine in Peru. I can't begin to imagine the fees on a large transaction.