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.
What digital services are subject to Dominican Republic VAT?
Income from the following services is liable to VAT:
- Gaming and games of chance
- SaaS or cloud-based software
- Streaming or download software
- Online storage
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|
|Bahamas||10%||Jan 2015||BSD 100,000|
|Barbados||17.5%||Dec 2019||BBD 200,000|
|Costa Rica||13%||Oct 2020||Nil||Withholding VAT option|
|Dominican Republic||18%||2023||Nil||Currently withholding VAT|
|El Salvador||13%||2022||-||Replace Withholding VAT|
|Paraguay||10%||Jan-21||Nil||Withholding VAT; 4.5% DST|
|Puerto Rico||10.5%||Jan 2020||$100,000; or 200 transactions||Marketplaces|
|Suriname||10%||Jan 2023||SRD 500,000|
|Uruguay||22%||Jan 2018||Nil||VAT and Withholding Tax|