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BiggerDominican Tax Reform eliminates exemptions for small online purchases
Santo Domingo.- The new Tax Modernization Bill proposed by the Dominican Government introduces significant changes to the tax treatment of online purchases. Previously, items valued at less than $200 bought through foreign platforms were exempt from taxes. Under the new bill, this exemption is removed, subjecting all online purchases to Value Added Tax (VAT) and other customs duties, regardless of the purchase amount.
The reform, detailed in Article 22 of the amended Tax Code, means that consumers will now pay taxes on items ordered from platforms like Amazon and eBay, ending a longstanding tax advantage for minor online purchases. The law also mandates that these taxes apply to all digital platforms serving Dominican consumers, even if the service provider lacks a physical presence in the country.
This policy change aligns with the global trend of taxing e-commerce transactions based on their destination, aiming to create a level playing field for local and international businesses while increasing government revenue from digital commerce.
We already have some of the highest taxes and cost per goods in the world. They still want to tax us to death!
The $200 tax exemption is an instrument to facilitate commerce among nations. It allows inexpensive and/or sample products to be imported and exported to and from the Dominican marketplace. It acts as an incentive to create a greater volume of business, tax revenue business. Should the RD be unwise and eliminate the exemptions, other nations would retaliate and tax Dominican goods under $200 entering their countries.