The Dominican Republic, an island nation in the Caribbean, has added local customers’ VAT obligations for foreign digital service providers. The House of Representatives will now take up the Bill for adoption in 2023.
The Dominican Republic began conducting consultations regarding the imposition of value-added tax on foreign digital or electronic service providers in August 2022. It would join more than 90 other nations that have implemented the OECD recommendations for electronic services and destination-based VAT.
The ongoing consultation examines requiring monthly reporting and VAT registration from non-resident service providers. In cases where customers pay these providers, this would take the place of the current requirement to withhold VAT.
The Dominican Republic’s current VAT rate is 18%.
Effective date: 2023