Ecuadorian income tax withholding on interest income

Just learned something new today. Ecuador has a 2% withholding tax on interest earned on CDs that are under one year in duration. This tax does not apply to ordinary passbook savings accounts or to CDs of one year or more. 

If you pay US federal income tax, you can claim a foreign tax credit on your Form 1040 for this income tax withheld at source.  

If you have an account at JEP, on the certificate of deposit itself it will appear as “Valor del Impuesto”, and if they print out for you a report of interest earned, it will be listed under “Impuesto Retenido.”

Ann Fourt: . 

City: Cuenca

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