Dominican Republic Tax Information for Non Profit Associations
Non for profit associations are created in Dominican Republic under Decree 520, part of the Dominican Republic Tax Code no. 11-92. Institution in charge of collection of taxes is called Direccion General de Impuestos Internos (DGII) and all of the declarations of taxes are accepted electronically at: www.dgii.gov.do ; payments are made through banks in Dominican territory including through internet banking.
Dominican Republic Tax Payer Duties
Taxpayers are under obligation to comply with such formal duties as are provided under tax code including:
a) Enrolment in the National Taxpayer Registration (RNC)
b) Advise on any change of address, corporate name, telephone number, business operation or any other as might alter tax responsibility
c) Carry such accounting books and records as were required
d) File tax returns in consistency with such documents and information as were required and provide such clarifications as were requested.
e) Appear before the DGII whenever required to
f) Facilitate any inspections and verifications by tax officers
g) Advise on any sale, liquidation or any other event within a term of 60 days to secure relevant authorization from the DGII DOMINICAN REPUBLIC TAXPAYER RIGHTS
Main rights assisting taxpayers are as follows:
a) Rights to an extension of term
b) Rights to payment facilities
c) Rights to exemption of advances
d) Rights to compensation
e) Rights to information on any action taken by DGII against taxpayer
f) Rights to confidentiality
g) Rights to file different administrative or judicial remedies.
Article 7 of law 11-92 compels Dominican non for profit organizations to keep specifically the following books related to fiscal obligations:
a) A record book including the name and surname, profession and domicile of each member;
b) An inventory detailing all real and personal property owned by Association.
Associations should also adopt any of the accounting methods approved by the Tax Administration to reflect the source and origin of all income received and such use and purpose thereof. Additionally, associations should file all appropriate tax returns.
As to any income tax payable by non profit associations, the following exemptions are provided under article 299 letter (d) of the tax code: “such income as were realized by any civil organizations engaged in social welfare, charity, benevolence, social, literary, artistic, political, labor or scientific organizations provided any income and corporate assets were used for the purposes of their organization and were in no case directly or indirectly distributed among members. Whenever any income were to accrue from any activities of a nature different from such purposes as the association was organized for, any such income shall be subject to taxation.
It is important to mention also that any donations to associations by individuals or corporations shall benefit from such deductions as are admitted in Tax code under article 287. However, these benefits will be honoured by DGII provided the association is already in the records of DGII for this purposes (renewable every three years) and under condition association has complied with its purposes and with any of the formal duties detailed above.
Such formal duties include the obligation by any association benefiting from any donations during the preceding year to file a report thereon with the tax administration by March 15 each year, including names of donors, amounts or assets donated.
Main Taxes Paid by Dominican Corporations
ANNUAL INCOME TAX
MONTLY DECLARATION OF COSTS AND PURCHASES ITEBIS
All the activities carried out by these associations are exempt of payment of Value Added Tax (VAT) or Impuesto a la Transferencia de Bienes Industrializados y Servicios (ITEBIS); meaning they are not supposed to charge ITEBIS in any of their invoices (if any)
However, ITEBIS should be paid when purchasing in a department store, supermarket or obtaining any service from a third party, renting a property. Notwithstanding, in the event in a particular case, the association will acquire a good or service as described above which cost is high enough to affect their income, they could request a Certification of Exemption to the Direccion General de Impuestos Internos (DGII) and specify the good or service and the name of the provider so that certification can be granted to provider not to pay ITEBIS. This will be valid for the third party not to pay for this tax to DGII.
DATE OF FILING: Within the first twenty (20) days of the month corresponding to the preceding month.
Annual Income Tax
Every year all corporations in Dominican Republic either for profit or non for profit are to file a declaration of income. Law 11-92 on Tax Law , there are fines of 10% of total income for the first month of delay and 4% thereof after second month of delay plus interests of 1.73% monthly for those who do not comply with this requirement of declaration, even if corporation have had no income during previous year. Non for profit corporations are exempted to any payment of income tax.
RETENTION AGENTS: All corporations either for profit or non for profit shall serve as retention agents of income tax of any work paid to employees and liberal professionals. Tax range is 15% to 30% depending on the amount paid and should be deducted from annual salaries or payment starting from 276,422.01 (around 8,376.42) and retained by corporation to be declared separately from income tax but on the same date each year.
DATE OF FILING: Until March 15th , each year for the preceding year.
MONTHLY DECLARATION OF COSTS AND PURCHASES
Under Decree no. 254-06 all corporations are to declare all of the purchases and expenses of operation in which corporation paid ITEBIS to third parties during the last month. This declaration should be made electronically.
DATE OF FILING: Until the 15th of each month for the preceding month.
AND REAL PROPERTY ASSETS TAXES
Real property assets are paid annually taxes of 1% of their total value on all properties of an appraisal starting at RD$5,000.000 (5 million Dominican pesos or around US$151,515.00) Non for profit organizations are exempted to pay for this taxes provided all assets are included in the detailed shown to DGII.
DATE OF FILING: Within the first 60 days of each year.
MIAMI OFFICE SANTO DOMINGO OFFICE
BRICKELL BAYVIEW CENTER Av. Abraham Lincoln #1003
80 SW 8TH ST, SUITE 2042 Torre Profesional Biltmore Suite 704,
MIAMI FL 33130, Ensanche Piantini, Santo Domingo
TEL. 305-428-2034 DOMINICAN REPUBLIC,
FAX 305 394-8915 TEL (809) 540 8001
www.wdalaw.com Fax (809) 540 8002
e-mail: [email protected]