Tourist VAT drops to 8% during the November holiday

Executive Decree No. 526 temporarily reduces the Value Added Tax (VAT) rate applicable to tourism services to 8% during Saturday, October 31, Sunday, November 1, Monday, November 2, and Tuesday, November 3, 2026. The measure was signed by President Daniel Noboa Azin on October 29 in Guayaquil and was published on Friday, October 30, 2026, in the Official Registry Sixth Supplement No. 401 (p. 11), effective immediately upon publication.

The decree is based on the unnumbered article following Article 65 of the Internal Tax Regime Law, which empowers the President of the Republic to reduce the general VAT rate to 8% for the provision of services defined as tourism activities during national or local holidays and the Saturdays and Sundays that precede or follow them, subject to a favorable opinion. The opinion was issued by the Ministry of Economic and Productive Development via official letter MDEP-VGF-2026-0683-O, dated October 27, 2026.

That same Article 65 establishes that the general VAT rate cannot be lower than 13% nor higher than 15%, meaning the reduction leaves the tax at 8% only for the four specified days. The Executive justified the decision as “an exceptional and focused tax policy measure,” aimed at incentivizing domestic tourism, promoting the formalization of the economy, and boosting the economic activity of the sector. The period coincides with the mandatory rest days of November 2 and 3 provided for in the Fourth General Provision of the Organic Law of Public Service and in Article 65 of the Labor Code.

Four days with reduced rate

Article 1 establishes the exact temporal scope of the reduction:

• Saturday, October 31, 2026
• Sunday, November 1, 2026
• Monday, November 2, 2026
• Tuesday, November 3, 2026

The reduction applies to the provision of services whose taxable event occurs on those dates, according to the legal authorization invoked in the recitals of the decree.

Which tourism activities are covered

The decree refers to Article 5 of the Tourism Law, which lists ten activities covered by the benefit:

• Accommodation
• Food, beverages, and entertainment
• Tourism agencies
• Tourism transport
• Organizers of events, congresses and conventions, meetings, incentives, conferences, fairs, and exhibitions
• Convention centers, reception halls, and banquet halls
• Tourism guiding
• Community tourism centers
• Theme parks and stable attractions
• Spas, thermal baths, and tourism recreation centers

The scope is not universal: the text reminds us that providers of these activities are required to obtain the Tourism Registry and the Single Annual Operating License for each activity they perform, except for the integrated business unit, which may operate with a single registry and license.

8% Vouchers and the Role of the Internal Revenue Service

Article 3 stipulates that establishments providing these activities must issue the corresponding sales vouchers applying the eight percent (8%) VAT rate during the indicated period. In other words, the reduction must be reflected in the invoice received by the customer.

Article 2 orders the Internal Revenue Service to take the necessary actions for the implementation and application of the decree. The Single General Provision entrusts the execution to the Internal Revenue Service, in coordination with the Ministry of Economic and Productive Development. The regulation entered into force upon its publication in the Official Registry, without a transition period.

Impact for Travelers and Providers

For the reader, the effect is direct on the pocket during the holiday: anyone staying in accommodation, consuming food and beverages, hiring transport or tourism agency services, or visiting theme parks and resorts during those four days must pay 8% VAT instead of the general rate, and has the right to demand that the voucher reflect that rate. For formalized hotels, agencies, and operators, the measure represents a price incentive during the highest demand season of the civic calendar and, at the same time, a requirement for tax compliance verifiable before the Internal Revenue Service. The decree was published in the same supplement as three other executive decrees, including No. 527, regarding exceptionality for the financing of permanent expenditures in health, education, and justice from the 2027 budget.

Source: Official Registry, Sixth Supplement No. 401, October 30, 2026, p. 11 (official reference: Executive Decree No. 526).