Dominican Republic’s 2024 Tax Reforms: New VAT on Digital Services and Income Tax Changes

The Dominican Republic is gearing up for significant tax reforms with the draft Law on Fiscal Modernization presented to Congress on 8 October 2024. A key highlight is the proposed VAT on digital services, which will impact international companies offering digital goods and services to customers in the Dominican Republic.

Other important elements include an increase in corporate tax rates for foreign transportation and insurance companies, raising the presumed income tax rate from 10% to 15%. Additionally, high-income earners will see a new personal income tax rate of 27% on earnings above DOP 2.4 million.

Changes to advance income tax payments are also part of the package, with micro and small enterprises benefiting from exemptions or reduced payments. Larger businesses will follow a revised payment schedule. Perhaps most notably, the current sales tax (ITBIS) will be replaced by a Value Added Tax (VAT) regime with a uniform rate of 18%.

To explore the full draft law, follow this link:
Ministry of Finance Draft Law