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Thread: What is ITBIS?

  1. #1
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    Default What is ITBIS?

    Hi,

    I work for a company that is starting to do business with the Dominican Republic. I have received some quotations adding ITBIS. Can somebody explain to me what it is?

    Thank you

  2. #2
    Rest in peace Amigo!
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    ITBIS is just one of many things of which you should be aware in order to successfully run a company in the DR.

    Good luck - did you try searching for "ITBIS"?

    I get 210 hits...

    "Showing results 1 to 25 of 210
    Search took 5.96 seconds."


    Gregg

  3. #3
    DR1 Expert
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    Read the sticky post above on Dominican Tax Law.
    Fabio J. Guzman
    Guzman Ariza
    Attorneys-at-Law
    Sosúa, Santo Domingo, San Francisco de Macorís, Cabrera
    Las Terrenas, Samaná, Bávaro (Punta Cana) and La Romana
    Dominican Republic


    info@drlawyer.com


    Website

    The opinion above should not be construed to be formal legal advice and was given without reviewing the facts and documents pertinent to the case. The reader should NOT act based upon this opinion without seeking professional counsel.

  4. #4
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    Quote Originally Posted by FireGuy View Post
    ITBIS is just one of many things of which you should be aware in order to successfully run a company in the DR.

    Good luck - did you try searching for "ITBIS"?

    I get 210 hits...

    "Showing results 1 to 25 of 210
    Search took 5.96 seconds."


    Gregg
    Fireguy,

    this is their first post & they didnt say they are running a business IN the DR...just doing business WITH the DR

    as a moderator, it may have been more beneficial for you to advise how to use the search function to find more information.

    Welcome to the board Renee

  5. #5
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    Default Itbis

    Extract from Guzman Ariza's Overview on Dominican Tax Law:

    Tax on the Transfer of Industrialized Goods and Services (ITBIS)

    The ITBIS is a value-added tax applicable to the transfer and importation of most goods, and to most services (Art. 335). The rate of the ITBIS is 16% (Art. 341). For imports, the ITBIS is charged on the CIF value of the goods plus applicable duty (Art. 339).There are many exemptions to the ITBIS tax (Arts. 342 and 343), among them, the following:

    * exported goods
    * basic foodstuffs
    * medicines
    * fuels
    * fertilizers
    * books and magazines
    * educational materials
    * financial services
    * transportation services
    * home rentals
    * utilities
    * educational and cultural services

    The 16% ITBIS must be added to every bill for goods and services that are not exempt. The individual or entity receiving the ITBIS must disburse it to the DGII within the first 20 days of the following month (Art. 353). Noncompliance is subject to a 10% surcharge for the first month and 4% for each month thereafter, in addition to 2.58% interest for each month or fraction of a month (Art. 252). From the total ITBIS received, the individual or entity is allowed to deduct any ITBIS paid to suppliers, customs, etc. (Art. 346).

    Alfredo

  6. #6
    Retired Ussername
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    A Free Zone company is also exempt from ITBIS charges, and receives a carnet to present for all purchases made outside a Free Zone for goods and services required by a Free Zone business. There is a monthly reporting requirement for all exempt purchases and an annual fee of about RD$2000 for the carnet.

  7. #7
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    Quote Originally Posted by GringoCArlos View Post
    A Free Zone company is also exempt from ITBIS charges, and receives a carnet to present for all purchases made outside a Free Zone for goods and services required by a Free Zone business. There is a monthly reporting requirement for all exempt purchases and an annual fee of about RD$2000 for the carnet.
    Must add that it doesn't mean a free-for-all on buying any goods in the outside of the FTZ legal channels.

    The goods must be itemized properly in order for the FTZ Company to claim the non-payment of the ITBIS in such cases.

    Unlike here in the US where I can get away with some stuff using a non-taxed ID to purchase goods from the local suppliers, the DR is best not fooled with as they're very cunning at getting you with some stuff they know just won't cut it.

    A 50% of the companies that did so in the DR now are paying ten fold the misuse of such VAT free usage without the right to do so.

    The other 50% paid by using the amnesty offered sometime ago...

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