The Double Taxation Relief and International Tax Enforcement (Ecuador) Order 2024

11 In relation to paragraph 3(c) of Article 11 it is understood that the term “financial institution” means: a a bank or other enterprise substantially deriving its profits by raising debt finance in the financial markets or by taking deposits at interest and using those funds in carrying on a business of providing finance; b a regulated insurance company c a regulated investment fund; and d any other entity or category of entity as may be agreed by the Competent Authorities as being reasonably understood to be a financial institution.

12 In relation to Article 19, Contracting State is understood to include, if it is Ecuador, any statutory body that falls under the definition provided by Article 225 of the Constitution of the Republic of Ecuador.

13 In relation to paragraph 6 of Article 23 it is understood that a national of Ecuador resident in the United Kingdom is entitled to personal allowances, reliefs and reductions equivalent to those available to a United Kingdom national who is also resident in the United Kingdom.

14 Having regard to the Commentary to Article 1 of the OECD model tax convention, as it may be revised from time to time, it is understood that this Convention shall not be interpreted to mean that a Contracting State is prevented from applying its domestic legal provisions on the prevention of tax evasion or tax avoidance where those provisions are used to challenge arrangements which constitute an abuse of the Convention.

15 It is further understood that an abuse of the Convention takes place where a main purpose for entering into certain transactions or arrangements is to secure a more favourable tax position and obtaining that more favourable treatment in these circumstances would be contrary to the object and purpose of the relevant provisions of the Convention. IN WITNESS WHEREOF the undersigned, duly authorized thereto by their respective Governments, have signed this Convention. Done in duplicate at Quito on this 6th day of August 2024 in the English and Spanish languages, both texts being equally authoritative. For the Government of the United Kingdom of Great Britain and Northern IrelandFor the Government of the Republic of Ecuador Baroness Chapman of DarlingtonGabriela Sommerfeld

Signed

Richard Tilbrook — Clerk of the Privy Council

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

The Schedule to this Order contains a Convention and Protocol (“the Arrangements”) between the United Kingdom of Great Britain and Northern Ireland and the Republic of Ecuador dealing with the elimination of double taxation with respect to taxes on income and on capital and the prevention of tax evasion and avoidance and assisting international tax enforcement. This Order brings the Arrangements into effect.

The Arrangements aim to eliminate the double taxation of income and gains arising in one country and paid to residents of the other country. This is done by allocating the taxing rights that each country has under its domestic law over the same income and gains, and by providing relief from double taxation. There are also specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement.

Article 1 provides for citation.

Article 2 makes a declaration as to the effect and content of the Arrangements.

The Arrangements will enter into force on the date of the later of the notifications by each country of the completion of its legislative procedures and will take effect in each country in accordance with Article 29 of the Convention.

The date of entry into force will, in due course, be published in the London, Edinburgh and Belfast Gazettes.

A Tax Information and Impact Note has not been produced for the Order as it gives effect to a double taxation agreement. Double taxation agreements impose no obligations on taxpayers, rather they seek to eliminate double taxation and fiscal evasion.

Footnotes