The Central Bank is authorized to issue securities known as TBCs (by their Spanish acronym). The TBCs are delivered to contractors as payment for goods or services provided to the Ecuadorian State. The Monetary and Financial Policy and Regulation Board is the entity that authorizes the Central Bank to issue TBCs which must be fully supported with Central Bank assets.

There are two ways for trading (buying-selling) the TBCs as determined by the Finance Ministry:

a. Through the Stock Exchanges:

Such trading can only take place with the presence of (i) security trading companies, and (ii) public operators (when a TBC holder is a public enterprise). Those institutions must be duly qualified and authorized and must trade through the Stock Exchange.  The TBC price is determined by the market.

This form of trading involves a commission to be paid to the broker and also to the Stock Exchange.

b. Through the private market:

If trading takes place through the private market, it is necessary to have a security sub-account at the Central Bank, such sub-account to be obtained through a duly authorized security trading company.

Once the sub-account is in place, the TBCs holder will instruct the Central Bank’s Payment Systems Office to transfer the TBCs to the buyer.

TBCs are used by their holders to pay any debts with the State and, especially, to satisfy tax obligations in whole or in part.

The Internal Revenue Service issued Resolution NAC-DGERCGC16-000000101 in order to inform about the tax payment process using TBCs. The Resolution states that the taxpayer has the following alternatives for paying taxes with TBCs:

a. To state the amount to be paid with TBCs in the tax return:

Before entering the amount in the tax return form, the taxpayer must authorize – through a security trading company or through the Central Bank centralized security deposit – the transfer of the relevant sum to the Tax Administration sub-account.  Once the amount has been transferred, the payment may be entered in the tax return form.

b. To settle any obligations with public payers and the Internal Revenue Service:

This alternative is applicable in such cases where firm debts with the Internal Revenue Service exist and, also, outstanding amounts are to be paid to any State institution.   This process involves the execution with the Finance Ministry of instructions addressed to the Central Bank’s Securities Office to transfer the corresponding amount to the Tax Administration’s sub-account.

According to public information provided by the Internal Revenue Service, 71 taxpayers already used this system in January and paid their tax obligations with TBCs resulting in a US$ 41,149,879 collection.


1 Published in Official Register Supplement No. 672 dated January 22, 2016.

Article by Perez Bustamante Ponce