DOMINICAN REPUBLIC Law and Practice Contributed by: Luis Miguel Pereyra, Pereyra & Asociados
of an MNE in the Dominican Republic and, conse - quently, further limit investment in the same. 9.12 Digital Economy Businesses Regulations related to the taxation of digital services have not yet materialised in the Dominican Republic, as in other jurisdictions. Initiatives to this end have been considered, and were even included as a poten - tial source of tax revenue in a recently proposed tax bill foreshadowing a significant overhaul of the tax regulations. However, the bill was not well received by civil society and certain economic sectors, and hence was dropped. In the Dominican Republic, a tax overhaul seems overdue. Most of the BEPs actions related to regula - tory commitments need to be approved by Congress; thus, it is expected that any bill will include provisions related to the taxation of digital economy businesses. 9.13 Approach to Digital Services Taxation The Dominican Republic is aiming for digital taxation and has made efforts to this end. However, it has not yet passed regulations that would facilitate digital taxation.
Nevertheless, a new tax has been discussed, similar to those already successfully implemented in other jurisdictions such as Colombia and Peru. However, this would represent a great challenge for the Domini - can Republic due to the insufficiency of the regula - tions. In other words, it is necessary to adapt domes - tic legislation to promote the development of digital trade by allowing the taxation of companies that may not have a presence in the country – ie, by requiring such companies to pay tax in order to carry out their activities. In principle, such a tax would likely be comparable to those applied to telecommunications services (VAT or ISC), to be withheld by the payment intermediary (ie, the electronic transfer/payment processor). However, the type of tax and the processes for its collection or
payment remain to be defined. 9.14 Offshore IP Provisions
There are no specific regulations dealing with the tax - ation of offshore intellectual property used within the Dominican Republic. The general rules on income tax, income source, withholding, etc, apply.
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