SRI Promotes 50%-75% Income-Tax Deduction for Youth Hiring
Ecuador's tax authority is again promoting hiring incentives aimed at formal employment.
Incentive Structure
Expreso reports that the Servicio de Rentas Internas (SRI) reminded companies they may deduct up to 75% additionally from the Impuesto a la Renta tax base when hiring young workers.
The benefit has been in force since December 2023, when the Ley Organica de Eficiencia Economica y Generacion de Empleo took effect.
| Hiring category | Additional deduction reported by Expreso |
|---|---|
| Young workers aged 18 to 29 | 50% |
| Public-university graduates, technical-institute graduates, or graduates of fiscal, municipal or fiscomisional schools | Up to 75% |
| New hires in construction and agriculture | 75% |
| People who served a custodial sentence of one year or more | 75% |
| People without a final enforceable conviction | 50% |
Expreso reports that SRI says the campaign seeks to promote youth job creation.
Prior Uptake
According to Expreso, SRI reported last October that company deductions applied after youth hiring totaled $3.4 million up to that point, with agriculture companies using the incentive the most.
Business Implications
| Sector / employer | Signal |
|---|---|
| Agriculture | Already the largest reported user of the youth-hiring incentive. |
| Construction | A 75% additional deduction can pair with broader sector policy incentives. |
| Formal employers | The incentive rewards net new hiring, not informal labor substitution. |
| Tax planning | Documentation and eligibility controls will be central to audit defensibility. |
What to watch
- Whether SRI publishes updated deduction uptake for 2026.
- Use of the incentive by construction and agriculture firms.
- Employer documentation standards for qualifying hires.
- Any enforcement or audit guidance tied to the campaign.
Source: Expreso
Source
Expreso — “El SRI promociona deducción de hasta el 75 % del IR para empresas que contraten jóvenes”
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