DOMINICAN REPUBLIC Law and Practice Contributed by: Sarah de León Perelló, Elizabeth Silfa Micheli and Naomi Rodríguez Manzueta, Headrick Rizik Álvarez & Fernández
The importation of goods into the Dominican Republic is subject to the following. Custom Duties (Tariffs) Goods are subject to seven different tariff rates, depending on the type of good: 0%, 3%, 8%, 14%, 20%, 25% and 40%. Excise Tax (ISC) Excise Tax is the tax applied to the transfer of certain domestically produced goods at the manufacturing level, as well as their importation, and the provision or leasing of specific services, such as telecommunications services, insurance services and financial transactions. Imported goods such as alcohol, tobacco, hydrocarbons, among others, are subject to this tax. The rate will depend on the type of product or service offered. Alcoholic products are taxed through fixed amounts determined by the volume of pure alcohol content, along with an additional 10% ad-valorem based on the suggested retail price. Tobacco products are subject to fixed amounts depending on the cigarette type, plus a 20% ad- valorem applied to the suggested retail price. Telecommunications services are taxed at a rate of 10%, while insurance services generally car - ry a 16% tax. Hydrocarbons are taxed through specific amounts per gallon, in addition to a 16% ad-valorem. Other goods are taxed based on the fixed amounts established under the Tax Code. Value Added Tax (ITBIS) The ITBIS rate applicable to the transfer of prod - ucts, the import of industrialised goods and the provision of services to the local market is 18%, calculated based on the net transfer price of
the good or service, in accordance with the Tax Code. The Dominican Republic has five trade agree - ments: • the Dominican Republic–Central America– United States Free Trade Agreement (DR- CAFTA); • the CARIFORUM–European Union Economic Partnership Agreement (EPA); • the Dominican Republic–Central America Free Trade Agreement (TLC RD/CA); • the Dominican Republic–Caribbean Commu - nity (CARICOM) Free Trade Agreement; and • the Trade Agreement between the Dominican Republic and the Republic of Panama. The Dominican Republic grants preferential tar - iffs to countries with which it has a free trade agreement, which benefit from reduced or zero tariffs on most goods. Additionally, certain sec - tors benefit from tariff or custom duty exemp - tions, including free trade zones, renewable energy projects, tourism development, non- profit organisations. Tariffs are often higher on: • agricultural products (poultry, rice, beans, dairy, onions and garlic, sugar, corn and wheat flour) to protect local producers; • beverages (beer, rum) to protect local indus - tries; and • textiles (higher on Asian and other non-prefer - ential countries). Because of recent global developments, the Dominican economy may face both potential benefits and difficulties. Higher gold prices may boost export revenues, while higher tariffs and a slowdown in global trade could negatively affect
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