A more efficient tax system has been put into place in the Dominican Republic with changes you should be aware of.
As one of the strongest economies in Latin America and the Caribbean, the Dominican Republic hosts corporations from all over the world. It has political and economic stability as well as strong social and educational policies. However, according to the World Bank Ease of Doing Business survey, the Dominican Republic ranks 149th for ease of paying taxes, taking an estimated 317 hours a year and costing 49% of profit.
The World Bank report: "Gearing up for a More Efficient Tax System in the Dominican Republic", states tax losses from fraud, fiscal evasion and bad management of the Transfer of Industrialized Goods and Services Tax (ITBIS, in Spanish), are among the largest in Latin America and the Caribbean. The government is aware that a more efficient tax system is required to stem these losses
Recent tax changes
As a result, the Fiscal Administration has submitted new requirements, such as complementary information about VAT compliance across the Norm 07-2018. This explains the new requirements that the companies must to submit monthly in their VAT declaration. The main elements are the New Structure for 606 Form (Expense and Purchase Fiscal Report), the New Structure for 607 Form (Revenue and Fiscal Receipts Report) and the IT-1 Form (Tax on Sale Report) including Annex A (detailed information).
Companies must now present the required information in the Norm like, kind of goods and services, Fiscal Receipts Number (NCF), date of receipts, date of payments, services invoiced, goods invoiced, VAT calculated, VAT Retained, VAT in proportion (when companies have taxable and not taxable sales), kind of payments, etc.
Corporate income tax is 27% and takes around 74 hours a year to complete. A major business tax change, launched by the Dirección General de Impuestos Internos (DGII) aims to mitigate the abuse that some companies were committing when deducting their expenses, with the aim to reduce their tax base. Companies must adjust the format of their invoices to incorporate the new requirements by the Fiscal Administration. Automatically printed fiscal receipts need the system updating to accommodate the changes. Items which need dealing with separately are: Legal Tips, IVA, Services, Goods, Other Taxes, Payment Method, Conditions. The deadline for this was 1 June 2018.
Those affected by the changes are all the...