Goods and Services exempt from VAT in the Dominican Republic: E-books are now VAT exempt.
On September 1,2021, the Dominican Tax Authority (DGII) issued a document Ruling No. GLN 25630 stating that if the content of an e-book is of a scientific or cultural nature, its online sale is exempt from VAT (in Spanish Transferencia de Bienes Industrializados or ITBIS). The new ruling is in accordance with Article 17 and 23 from Law 502-08 on Books and Libraries, and Article 343 of the Dominican Tax Code.
Article 343 of the Dominican Republic Tax Code sets out a list of exempt goods and Article 344 sets out a list of exempt services. Exempt goods include the following, subject to certain conditions and requirements: live fresh animals; fresh meat, chilled and frozen meat; and plants and seedlings. Exempt supplies are not subject to VAT, and do not carry the right to an input VAT deduction on related purchases.
Goods exempt from VAT in the Dominican Republic
Exempt goods include the following, subject to certain conditions and requirements:
- Live fresh animals
- Fresh meat, chilled and frozen meat
- Fish for consumption or reproduction
- Dairy milk and honey
- Other animal products
- Plants and seedlings
- Vegetables
- Unprocessed fruits for mass consumption
- Cereals, grains and flour and grain mill products
- Oil seeds and other seeds for planting (for fat, seed or animal fo
- Sausages
- Cacao beans and residues
- Baby food, pasta, bread
- Drink like natural water
- Livestock supplies
- Fuel
- Medicine
- Fertilizer and its components
- Metals
- Insecticides, fungicides, herbicides
- Other inputs or agricultural capital goods
- Books and magazines
- Pre-university educational materials
- Wheelchairs and other vehicles for persons with disabilities; and
- Prosthetic joints.
In addition, imported goods from the primary sector that are cut, dried, frozen, fresh, packed, with no seeds, and provided the good has not been transformed from its natural condition, are also exempt.
Services exempt from VAT in the Dominican Republic
Article 344 of the Tax Code includes the following exempt services, subject to certain conditions and requirements:
- Financial services, including insurance
- Pension and retirement plans
- Ground transportation for persons and cargo
- Electricity, water and garbage collection
- Housing rentals
- Health services
- Education and cultural services;
- Funeral services; and
- Services rendered by beauty salons and hairdressers
In addition, the following services are also exempt from VAT, subject to certain conditions:
- Services provided to public institutions, entities under a free trade zone regime, embassies, consulates and international organizations according to international conventions and agreements, services provided by recognized chambers of commerce and export services, including cargo handling at ports and airports, casinos, lottery, sports games, tournaments, and fairs and exhibitions.
In case of exports of services, VAT does not apply if the following conditions are met:
- The payment for the service is made from a foreign source
- The expense does not affect any taxable income or expenses in the Dominican Republic and
- The payer is not domiciled or a resident in the Dominican Republic
Source: dgii.gov.do
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.