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Dominican Republic 2023 18% VAT on foreign digital service providers

2023 Budget introduce 18% VAT on non-resident providers of e-services

The Caribbean island state of Dominican Republic has included VAT liabilities for foreign providers of digital services for local consumers. The Bill will now pass to the Chamber of Representatives for implementation in 2023.

Consultation started in August

The Dominican Republic started consulting on imposing Value Added Tax on foreign digital or electronic service providers. It would join over 90 other countries that have followed the OECD guidelines on electronic services and VAT on a destination-basis.

The ongoing consultation is looking at imposing VAT registration and monthly reporting on non-resident providers. This would replace the existing withholding VAT obligation where consumers make payments to such providers.

The current VAT rate in the Dominican Republic is 18%.   Follow VAT Calc’s global VAT and GST on digital services tracker for live updates on worldwide reforms.

What digital services are subject to Dominican Republic VAT?

Income from the following services is liable to VAT:

  • Gaming and games of chance
  • E-learning
  • Apps
  • SaaS or cloud-based software
  • Streaming or download software
  • Online storage
  • Advertising

Determining if VAT is due

Providers could rely on any of the following to determine if the service was consumed in the Dominican Republic, and therefore VAT due:

  • IP address
  • SIM card address
  • Payment from card registered locally
  • Billing address

Filing digital services VAT returns

Compiling VAT or GST return can be complex.  VAT Calc’s single platform VAT Filer can correctly complete any country filings with verified VAT or GST transactional data from our VAT Calculator or VAT Auditorintegrated tools.

Central and South America VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Argentina 21% Apr 2018
Bahamas 10% Jan 2015 BSD 100,000
Barbados 17.5% Dec 2019 BBD 200,000
Bolivia 13% Nov 2022 -
Brazil n/a n/a n/a Various proposals
Chile 19% Jun 2020 Nil
Colombia 19% Jan-18 Nil
Costa Rica 13% Oct 2020 Nil Withholding VAT option
Dominican Republic 18% 2023 Nil Currently withholding VAT
Ecuador 12% Sep 2020
El Salvador 13% 2022 - Replace Withholding VAT
Guatemala 12% TBC
Honduras 15% 2022 HNL 250,000
Panama 10% 2022 Withholding VAT
Paraguay 10% Jan-21 Nil Withholding VAT; 4.5% DST
Peru 18% 2022 Nil Withholding VAT
Puerto Rico 10.5% Jan 2020 $100,000; or 200 transactions Marketplaces
Uruguay 22% Jan 2018 Nil VAT and Withholding Tax

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