The Dominican Republic has recently passed a new law that requires taxpayers to issue electronic tax invoices. This law will be implemented in a phased manner, with different deadlines for different types of taxpayers. Large national taxpayers will have a maximum of 12 months to implement the electronic fiscal receipt, while big and medium-sized local taxpayers will have 24 months. Small, micro, and unclassified taxpayers will have the longest implementation period of 36 months.
Under this new law, taxpayers will be required to issue electronic tax invoices in a specific format called local XML. These invoices must be signed and transmitted electronically to the responsible tax authority, known as the DGII. To ensure the authenticity and integrity of these electronic invoices, a digital signature will be mandatory. The management of these digital signatures will be handled by the Dominican Telecommunications Institute (INDOTEL).
This new law was approved and announced on May 16, 2023, and is expected to bring several benefits to the Dominican Republic. One of the main advantages of implementing electronic tax invoices is the reduction of paperwork and administrative burden for both taxpayers and the tax authority. Electronic invoices can be processed and stored digitally, eliminating the need for physical storage and manual data entry. This will not only save time and resources but also reduce the risk of errors and fraud.
Moreover, the implementation of electronic tax invoices will improve tax compliance and transparency. The electronic system will allow the tax authority to have real-time access to taxpayers’ transaction data, making it easier to detect and prevent tax evasion. This will ultimately contribute to a fairer and more efficient tax system in the Dominican Republic.
The phased implementation of this new law takes into consideration the different capacities and resources of taxpayers. Large national taxpayers, who typically have more advanced systems and processes in place, will have a shorter implementation period of 12 months. On the other hand, small and micro taxpayers, who may have limited resources and technological capabilities, will have a longer implementation period of 36 months.
It is important for taxpayers to start preparing for the implementation of electronic tax invoices as soon as possible. This includes ensuring that their systems and processes are compatible with the local XML format and that they have the necessary infrastructure to transmit invoices electronically. Taxpayers should also familiarize themselves with the requirements and guidelines provided by the tax authority to ensure compliance with the new law.
Overall, the implementation of electronic tax invoices in the Dominican Republic is a significant step towards modernizing the tax system and improving efficiency and transparency. It is expected to bring numerous benefits to both taxpayers and the tax authority. However, it is crucial for taxpayers to be proactive and adequately prepare for this transition to ensure a smooth and successful implementation.