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Dominican Republic - Other Taxation
Often ITBIS is not included in the price and you have to pay it on top. This often happens in some supermarkets, restaurants, hotels, so it is always worth checking. In hotels and restaurants not only is ITBIS put on top of the bill, but so is a 10% service charge, making an additional 26% on top of the bill. Sometimes offering to pay with cash as opposed to credit card can relieve the need to pay this tax. Corporation tax is currently at 27% on all income.
The whole area of taxation in the Dominican Republic is not well policed as in the UK and the USA. On the one hand it is sometimes possible to avoid paying tax, especially for those who work freelance, but on the other hand the tax authorities will often think that they can charge foreigners more, especially those who neither speak Spanish nor know the system well. It is always advisable to have a trustworthy accountant before setting up any business.
A great book with excellent information on taxation, accompanied by a website which keeps the key information updated.
Expat FAQs: Moving to and Living in the Dominican Republic. By Ginnie Bedggood and Ilana Benady
Direccion General de Impuestos Internos
This guide was compiled with the help of Lindsay de Feliz, a British expat blogger living in the Dominican Republic. Visit her blog at yoursaucepans.blogspot.com.
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