Tax havens in Ecuador: reality or utopia?

Abstract

Tax havens emerged as a means to attract foreign investment through permissive regulations. This approach allowed taxpayers to avoid taxation in their country of residence, thereby disrupting state revenue collection. This research article analyzed whether the Ecuadorian state provided any tax incentives to individuals and legal entities through the application of international agreements or regulations, potentially leading to either no incentives or lower tax burdens. This, in turn, influenced the deposit of funds in non-cooperative jurisdictions. To examine this issue, a qualitative methodology was applied, utilizing various legal research methods. These methods helped address the question of whether tax havens are merely a theoretical concept. The study concluded that, as in many other countries, this fiscal practice is actively carried out in Ecuador. Since tax havens operate in a largely unregulated space, they facilitate illicit activities that impact national economies. The lack of financial transparency in non-cooperative jurisdictions ultimately affects the proper functioning of a country's economy.