Indirect Tax News - May 2020

VAT measures to face the impact of COVID-19

As a result of the health crisis generated by COVID-19, the Dominican Republic has instituted a series of fiscal measures to ease the tax burden of taxpayers.

Among the relief measures adopted are some specifically related to the VAT (ITBIS, as it is known in Spanish). For companies in free zones and operators of parks in free zones that have an exemption card for VAT that expired on 19 March 2020, the exemption card’s validity has been extended to 30 June 2020.

Likewise, payment facilities have been granted for the VAT of February and March 2020. Under the payment facilities the amount owing for February VAT can be paid over four equal monthly installments and the amount owing for March VAT can be paid in three equal monthly instalments without incurring any penalties.

These payment facility relief measures are applicable for February and March 2020. If the crisis generated by COVID-19 continues to affect the local economy, the Tax Administration will have similar measures for the filings in the coming months.

It should be noted that according to official publications, the collection of VAT fell off by 62.5% in March 2020 versus March 2019.

Pablo Matos