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 2023 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 registration threshold
There is no registration threshold in Dominican Republic. Businesses who 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. 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).
Digital services which would be the subject to ITBIS collection in Dominicana:
- online advertising,
- online intermediation (commissions),
- data transmission,
- streaming, etc.
Businesses need to register electronically or in person with the Dominican tax authorities within 30 days of the date on which tax liability begins.
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 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 amount due be charged for the first month of overdue, and 4% for the next months.