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  1. #1
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    Default Lets talk about accounting...

    I would like to know other DR1'ers opinion's that have businesses here about doing their own taxes and reporting them. From what I've heard and seen in class the Dominican tax law is complicated and vigorous.

    I've heard the going rate for a corporation is RD7000 a month for an accountant which is basically the same I pay my accountant in Florida for doing my Federal taxes for my business.

    I'd like to discuss the feasibility and legality of one learning how to do their own taxes as I plan on getting incorporated and am trying to limit overhead. I expect my business could make RD500k to 1M a year. TIA.

  2. #2
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    chip, our accountant is from santiago, he charges 5.000 pesos per month (but we are in POP). why don't you give him a call and check his current rates? anulfo: 809 864 8992, [email protected].

    maybe you could start off with the accountant until you learn the ropes?

  3. #3
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    Quote Originally Posted by dv8 View Post
    chip, our accountant is from santiago, he charges 5.000 pesos per month (but we are in POP). why don't you give him a call and check his current rates? anulfo: 809 864 8992, [email protected].

    maybe you could start off with the accountant until you learn the ropes?
    Thanks dv8. I'm going to try to learn it because I've had two accounting classes and we covered some of the basics of the laws here so I thought I'd give it a whack - but if I can't I'll get an accountant of course. What's impressive is for all the "supposed" ineptitude and backwardness of the DR they have a pretty high tech system of accounting as I understand it.

  4. #4
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    how about that: you could do the accountancy yourself and have a contable on call checking your paperwork once or twice a month. should be cheaper that way. but you will need one for closing the year (final papers have to be authorized by a professional).

  5. #5
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    Quote Originally Posted by dv8 View Post
    how about that: you could do the accountancy yourself and have a contable on call checking your paperwork once or twice a month. should be cheaper that way. but you will need one for closing the year (final papers have to be authorized by a professional).
    From what I understand that's all you get for the standard RD7000 a month. I talked with an engineer friend in class and he told me this. I was hoping to learn the specifics of reporting and the available software out there. I believe rubio higuey does his own so maybe he will chime in.

  6. #6
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    If you are talking about reporting the ITBIS, you do it on your own, online, in a horribly designed spreadsheet.

  7. #7
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    Quote Originally Posted by Expat-in-Cabarete View Post
    If you are talking about reporting the ITBIS, you do it on your own, online, in a horribly designed spreadsheet.
    How often is the reporting done, I seem to remember it's once a month?

  8. #8
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    Form 606 - expenses -
    Form 607 - invoices -
    Uploaded as "text file" (output from the same spreadsheet)
    ITBIS, done once per month, via online form IT-1.

    Income tax, once per year, IR-2.
    A bit complicated in the beginning, but if you know accounting basics, doable on your own. Some exhibits won't apply to you, some I was straightforwardly suggested by a DR CPA to just "leave blank", that "for a small company nobody cares about them".

    I do my own taxes for my two companies.
    The biggest hassle is filling out 606 spreadsheet. The more receipts you get (invoices) from others, the more lines you have to fill out.

    Also, I have had my own dose of "rectificacion" (corrections) dating back 18 months, and redoing all ITBIS declarations (all because of one incorrectly reported invoice in the beginning, when I was just learning the ropes).

    Also beware that DR accounting is on ACCRUAL BASIS only, NO CASH BASIS. Your payment of ITBIS from your-issued invoices is due on the 20th of the next month REGARDLESS if you got the money from the client or not. Many decide not to pay and run the penalties and pay after they get paid from their clients.

    The penalty is 12.58% for the first month and 6.58% for each additional month. This includes the penalty and 2.58% interest.

    I found a way to "save" if you decide to run a penalty (e.g. the client didn't pay you and you have no money to pay ITBIS on time) - DO NOT report that invoice in that month (on IT-1). Rather, submit IT-1 without that invoice and once you get paid, do a RECTIFICACION (correction). You will only be liable for a penalty of 7.58% the first month and 4.58% each additional month *. A bit of work (you have to bring corrected IT-1 to the DGII, cannot be done online) but you can save some %% off.
    * It's 50% of penalty (5% out of 10% and 2% out of 4%) plus 2.58% interest. You have to pay the lump sum of balance owed that was generated by that rectificacion to qualify.

    Also, you should start building an ITBIS cushion. After you incorporate and get RNC#, you can start "collecting" your expenses and accruing ITBIS in your favor as a credit. This credit does not expire (no cash back either as they give you in Europe though). In a month when you owe a balance of ITBIS to DGII, from that balance will be deducted the balance of ITBIS you get in your favor that month, plus any balance you have in your favor from previous months.

    Also, the penalty is only from the "net balance" of ITBIS you owe to DGII, not from the whole balance you generated that month.

    P.S. I have RNC, NCF and ITBIS manuals form DGII. If your PM me your email, I can send them to you.
    Last edited by rubio_higuey; 05-17-2012 at 05:16 PM.

  9. Likes Chip, Maribeldiaz70 liked this post
  10. #9
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    Interesting read for me since I am an Accountant in NY.

    Super Moderator DR1.com

  11. #10
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    Quote Originally Posted by Chip View Post
    I would like to know other DR1'ers opinion's that have businesses here about doing their own taxes and reporting them. From what I've heard and seen in class the Dominican tax law is complicated and vigorous.

    I've heard the going rate for a corporation is RD7000 a month for an accountant which is basically the same I pay my accountant in Florida for doing my Federal taxes for my business.

    I'd like to discuss the feasibility and legality of one learning how to do their own taxes as I plan on getting incorporated and am trying to limit overhead. I expect my business could make RD500k to 1M a year. TIA.
    I have one for RD$3000/month here in Jarabacoa.

  12. Likes Chip liked this post
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