The 0.15%: What you should know about this tax
Santo Domingo.- The tax on cheque issuance and payments by electronic transfers is a provision of the Tax Code, which applies to both individuals and companies and is calculated at a rate of 1.5 per thousand (RD $0.0015 or 0.15% for each peso) on the value of cheques of any nature paid by financial intermediation entities (EIFs) and on electronic transfers or payments made to third parties.
According to the law, the financial entity acts as an intermediary to retain the resources corresponding to the tax payment, whose destination is the Directorate General of Internal Taxes (DGII).
What are the transactions that apply to this tax?
The issuance of cheques, whether administrative, for the sale or purchase of foreign currency, even if the account is located abroad.
Cheques are paid via clearing house, deposited in the same bank, and over the counter.
Payments via wire transfers, whether for personal loans or credit cards.
Transfers to third-party accounts, whether within the same entity or to another, for any reason.
Transfers between accounts held by one account holder and a joint account with a third party other than their spouse.
Transfers to the stock exchange or investment funds for the acquisition of shares, whether the account is held by the same account holder, jointly with the spouse, or located abroad.
Banking operations, such as accreditations, transfer of funds, and disbursements, are carried out by the same entities as their clients.
Interbank transactions are carried out by banks based on any instruction from one or more of their customers or in their interest.
The withdrawal of cash made by a third party with a code through an ATM also generates this tax of 0.15%.
In which cases does the withholding tax NOT apply?
Transfers between accounts held by the same account holder and those held jointly with their spouse, whether in the same FIU or between FIUs, national or international.
Cash withdrawals at ATMs and bank branches.
Social Security payments.
Transactions and payments made by pension funds.
Credit card payments.
Payments and transfers made in favor of the Dominican State for taxes.
What are the requirements for the exemption of transfers between joint accounts?
You must present to the entity from which you make the transaction a certification issued by the entity receiving the transfer, stating the names of the co-owners. The certificate must contain the National Taxpayers’ Register (RNC), the account number, and the date the account was opened. It would be best if you informed the bank or entity from which the transfer is made in advance so that they can take the information into account.
What are the requirements for the exemption of transfers between an account held jointly with the spouse?
To apply for tax exemption on an account that you share with your spouse, you must present the corresponding marriage certificate to the entity, together with the certification issued by the entity that receives the transfer, where the name of the spouse, the National Taxpayers Register (RNC), the number of the account and the start date of the account appear.
Why do you withhold tax when I make transfers to pay my credit cards and loans?
Loans and credit cards are assets of the bank. Therefore, even if these products are in your name when you make the transfer, it is not exempt from the 0.15% withholding tax because it is a payment to a third party (the bank).
Remember that the tax does not apply when interbank transfers between accounts belong to the same account holder.
What can I do if I have 0.15% withholding tax withheld on a transaction that does not apply?
Make a transfer between two accounts that are in your name, and you were charged the tax incorrectly, according to the guidelines indicated above. You can make a formal complaint to the entity issuing the transaction. If you do not receive a response from the entity or receive a reply with which you are not satisfied, you can file your complaint with ProUsuario, either in person or online.
Financial Intermediation Entities (EIFs): Financial institutions authorized by the Monetary Board and supervised by the Superintendency of Banks, which are dedicated to regularly collecting funds from the public to transfer them to third parties. They are divided into Multiple Banks, Savings and Credit Banks, Credit Corporations, Savings and Loan Associations, and Public Entities.
Joint account: this is a type of account that has two or more account holders. Within our financial system, these are offered based on two conjunctions, “and” or “and,” which determine the handling of the money in the account. In the case of the “and,” both account holders must sign, while in the “and,” either of the two can sign indistinctly.