DGII says electronic invoicing will be enforced nationwide by 2025

[Dolores]

The Tax Agency (DGII) is going forward with the implementation of electronic billing in the Dominican Republic. The plan is to enforce electronic billing by 2025.

The electronic billing system connects the point of sale to the DGII computer over the internet, and each time a sale is made and a sales receipt is issued, the transaction is recorded in real-time by the government tax agency. The system is expected to reduce the possibility of tax evasion and under-invoicing.

When visiting the Corripio Media Group on 22 March 2022, the director of the Tax Agency, Luis Valdez said that the system is being implemented in a gradual manner. First are the large taxpayers who have to comply from January to December 2023. In 2024, large and medium-sized businesses need to enter the system and finally, as from 2025, the system will also be mandatory for micro and small...

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[drstock]

We'll see how this turns out. The local one-man barber shop or the guy selling fruit producing electronic invoices? Hard to imagine.

 

[windeguy]

We'll see how this turns out. The local one-man barber shop or the guy selling fruit producing electronic invoices? Hard to imagine.

This ties into the cashless society Pichardo proposed previously that would be upon us and is just around the corner.

 

[aarhus]

So it’s like the government providing companies with an accounting system. Not sure I really understand this. It’s your obligation to report your income and expenses to the internal revenue the dgii but in this case they come to your business and do it for you ? Maybe someone on the board understands this better than I do.

 

[NALs]

We'll see how this turns out. The local one-man barber shop or the guy selling fruit producing electronic invoices? Hard to imagine.

 

[aarhus]

It’s actually does say in article that it will be mandatory to use the system of the dgii; ““Cuando inicie la etapa de obligatoriedad los primeros que deberán someterse a este método son los grandes contribuyes nacionales, quienes tendrán desde enero hasta diciembre del 2023 para hacerlo. En el 2024 siguen los locales grandes y medianos y finalmente, a partir del 2025, entrarían los micro y pequeños empresarios” So you will not need to set up Quickbooks or Alegra or any other accounting system I guess. The dgii the Dominican internal revenue provides a system for your business.

 

[JD Jones]

It wil happen using e-wallets. It's already being done in many countries. The tax paid to the govt. is seamless.

 

[aarhus]

It wil happen using e-wallets. It's already being done in many countries. The tax paid to the govt. is seamless.

I don’t know if the DR is ready for this and their way of implementing it seems to be top down by force and by providing businesses with the system for it. Maybe it’s my lack of understanding but isn’t it the business who sets up their own system in order to comply.

 

[JD Jones]

I don’t know if the DR is ready for this and their way of implementing it seems to be top down by force and by providing businesses with the system for it. Maybe it’s my lack of understanding but isn’t it the business who sets up their own system in order to comply.

They do it by eliminating paper money. After that, it's either by barter or uses the system on your cel phone.

 

[aarhus]

They do it by eliminating paper money. After that, it's either by barter or uses the system on your cel phone.

It sounds to me like the government the dgii micro managing companies but maybe I am misunderstanding something and it’s really a good thing.

 

[Buffness]

So it’s like the government providing companies with an accounting system. Not sure I really understand this. It’s your obligation to report your income and expenses to the internal revenue the dgii but in this case they come to your business and do it for you ? Maybe someone on the board understands this better than I do.

No , many Latin American countries like Brazil , Mexico and Chile have this system already. DR is only now catching up after seeing the benefits in other countries …especially in terms of improving fiscal control and reducing high rates of tax evasion .

The way it works, basically, is that companies submit and formalize every business invoice electronically through the government tax authority before it can be sent to customers and your suppliers do the same…so tax authorities (e.g.DGII) do not “come to your business and do it for you”….you send them the invoices electronically . Huge penalties if you don’t.

It all started in Chile early 2000 ,now Mexico and Brazil are leaders in this area …the results are astounding in some countries … some countries saw 50% or more reduction in corporate tax evasion and collected billions in additional tax revenue. Some European countries are adopting the system as we speak.

I don’t think the “local one-man barber shop or the guy selling fruit “ would need to worry about electronic invoices …the obvious focus would be on the large multinationals to begin with , at least…

 

[Buffness]

Maybe it’s my lack of understanding but isn’t it the business who sets up their own system in order to comply.

Yes, the business sets up their own system …. they take extracts from their system to send to the government platform…electronically .. which then sends the approval/certification/call it what you will …back to business’ system. Compliance basically is when the government has seen an approved your transactions.

 

[Buffness]

It sounds to me like the government the dgii micro managing companies but maybe I am misunderstanding something and it’s really a good thing.

Not so much micro managing, …more the tax authorities will now have a full view of companies‘ business transactions….from every angle…
…transparency ….as one client once said “ you can’t run or hide…”😬🇩🇴🇧🇷 …

 

[drstock]

I don’t think the “local one-man barber shop or the guy selling fruit “ would need to worry about electronic invoices …the obvious focus would be on the large multinationals to begin with , at least…

The article says: "When visiting the Corripio Media Group on 22 March 2022, the director of the Tax Agency, Luis Valdez said that the system is being implemented in a gradual manner. First are the large taxpayers who have to comply from January to December 2023. In 2024, large and medium-sized businesses need to enter the system and finally, as from 2025, the system will also be mandatory for micro and small businesses."

I would count one man bands as "micro and small businesses", so they are hoping to have the system implemented for them as soon as 2025.

 

[aarhus]

No , many Latin American countries like Brazil , Mexico and Chile have this system already. DR is only now catching up after seeing the benefits in other countries …especially in terms of improving fiscal control and reducing high rates of tax evasion .

The way it works, basically, is that companies submit and formalize every business invoice electronically through the government tax authority before it can be sent to customers and your suppliers do the same…so tax authorities (e.g.DGII) do not “come to your business and do it for you”….you send them the invoices electronically . Huge penalties if you don’t.

It all started in Chile early 2000 ,now Mexico and Brazil are leaders in this area …the results are astounding in some countries … some countries saw 50% or more reduction in corporate tax evasion and collected billions in additional tax revenue. Some European countries are adopting the system as we speak.

I don’t think the “local one-man barber shop or the guy selling fruit “ would need to worry about electronic invoices …the obvious focus would be on the large multinationals to begin with , at least…

But the DR is actually already doing this and the last 15 years. When I had my business we used the government invoice numbers both the ones we issued and the ones issued to us being our expenses. It is a monthly reporting. So what is going to be different now ?

 

[aarhus]

Yes, the business sets up their own system …. they take extracts from their system to send to the government platform…electronically .. which then sends the approval/certification/call it what you will …back to business’ system. Compliance basically is when the government has seen an approved your transactions.

Yes the last 15 years it’s been this way. What’s new then?

 

[windeguy]

Will the old adage that nothing is certain but death and taxes with big brother watching every transaction actually apply since evasion is now futile?

 

[aarhus]

The article says: "When visiting the Corripio Media Group on 22 March 2022, the director of the Tax Agency, Luis Valdez said that the system is being implemented in a gradual manner. First are the large taxpayers who have to comply from January to December 2023. In 2024, large and medium-sized businesses need to enter the system and finally, as from 2025, the system will also be mandatory for micro and small businesses."

I would count one man bands as "micro and small businesses", so they are hoping to have the system implemented for them as soon as 2025.

I agree. This plan means everyone by 2025.

 

[aarhus]

The DGII has an interesting practice. If you issue an invoice and report and pay the Itbis from last month. If the client doesn’t pay and you don’t manage to change it immediately next month they consider it to late. I have experienced it. Many have. For a friend of mine it really damaged his business. In my business we learned to be very vigilant about this. It was especially tricky when dealing with US brokers when splitting commissions.

 

[Sol09]

Yes the last 15 years it’s been this way. What’s new then?

Currently, the reporting of sales and the associated taxes collected is done via manual, self reporting. It seems this new system will integrate a company's POS with the DGII so that the amounts will be reported automatically for each transaction.

This will reduce the underreporting of taxes collected.

When a company makes a sales to a consumer and collects 100.00 in ITBIS, they self report and remit that amount by the 20th of the following month. My understanding of this new system is that the 100.00 of ITBIS will be reported automatically at the time of sale. This eliminates the chance to exclude some sales for the self reporting way and pocket the taxes collected.

I have not seen one man shops (barbers, salons, colmados, roadside produce stands, etc.) issue invoices with tax credit as it is now so this new electronic invoicing probably won't affect them.