Dominican Republic
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About
Goods
About
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About
Digital services
About
Digital services
Goods
Digital services
Goods
Digital services
VAT Standard rate
The standard VAT rate in the Dominican Republic in 2024 is 18%. ITBIS, or Impuesto sobre Transferencia de Bienes Industrializados y Servicios, is the Dominican Republic’s version of VAT (Value Added Tax).VAT Reduced rate
16%- This reduced rate applies to specific food products (sugar, coffee, butter, margarine, oils, yogurt, and other dairy products).
- This rate applies for goods export.
The draft Regulations for the application on ITBIS to digital services of foreign suppliers are currently (at the moment of publication this guide) under consideration and discussion. It is expected that the amendments will be implemented in 2024.
VAT Standard rate
VAT standard rate in the Republic of Dominicana in 2024 is 18%, which applies to all digital services provided via the Internet that are used in the country and provided by non-resident businesses in the Dominican Republic. The local name of VAT is ITBIS.
VAT Standard rate
18%
VAT Reduced rate
16%, 0%
Thresholds
-
Thresholds
Dominican tax law does not require a minimum sales amount for a business to register and pay VAT.Registration procedure
– Obtain a Tax Identification Number (RNC). The first step for any business is to obtain a Registro Nacional de Contribuyentes (RNC), the tax identification number. – Submit Documentation. The business must submit the required documentation to the Dirección General de Impuestos Internos (DGII). It typically includes:- Completed registration forms;
- Identification documents of the business owner(s) or legal representatives;
- Proof of address;
- Certificate of incorporation or equivalent document for legal entities;
- Any other documents specified by the DGII.
Tax representative
In the Dominican Republic, foreign entities that engage in economic activities within the country may be required to appoint a tax representative. In what cases may the entity need a representative?- No Permanent Establishment;
- Specific Tax Obligations;
- Legal Requirements.
Keeping records
Businesses must maintain accurate records of all transactions, including sales and purchases, to support the ITBIS filings. As for the record retention period, conforming to the Dominican Republic tax code, accounting records need to be kept for 10 years.VAT payment
Once registered, businesses must file monthly ITBIS returns, typically by the 20th day of the following month. These returns detail the ITBIS collected from sales, and the ITBIS paid on purchases.Filing VAT returns
VAT return must be submitted to the DGII by the deadline. Businesses can typically submit returns electronically or through other approved channels. Along with the VAT return, any VAT liability for the reporting period must be paid to the DGII by the filing deadline. Payment can usually be made online or through authorized banking institutions.Penalties for Non-Compliance
Failure to register for ITBIS, file returns, or pay taxes can result in penalties, fines, and interest charges. The DGII has the authority to enforce these penalties to ensure compliance.VAT registration threshold
There is no registration threshold in the Dominican Republic. Businesses that provide digital services must register for ITBIS. Providers must establish a permanent presence in the country or ITBIS cannot be transferred to or reimbursed in the Dominican Republic. A business that registers for ITBIS purposes in the Dominican Republic is equivalent to a permanent establishment.Pieces of evidence
VAT is payable at the place of supply. The time of supply is the earliest event among the following: at the moment the service occurs, at the moment of billing, or at the moment the price is paid (in whole or in part).E-services list
Digital services which would be subject to ITBIS collection in Dominicana:- online advertising,
- online intermediation (commissions),
- data transmission,
- streaming, etc.
Registration procedure
Businesses need to register electronically or in person with the Dominican tax authorities within 30 days of the date on which tax liability begins.Keeping records
The period of keeping records in Dominicana must be at least ten years.VAT returns filing and payment date
The ITBIS returns in Dominicana are submitted on a monthly basis. The deadline for filing and payment is the 20th of the month following the reporting period.Penalties for VAT in Dominicana (ITBIS)
For late filing and payment of ITBIS in Dominicana, a penalty of 10% of the amount due be charged for the first month of overdue, and 4% for the next months.
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