DGII taxes

MarkDR

Member
Feb 18, 2016
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When you are doing your DGII taxes for the year and either don't have an NCF number on a receipt or don't have the receipt do you still declare the expenses (form 606).
 

TropicalPaul

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Sep 3, 2013
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To start with you need to be registered with DGII, I assume you are. You have to submit the 606 monthly along with the IT1 form, the deadline is the 20th of the month. You basically add up the ITBIS you have charged and then deduct the ITBIS you have paid. For ITBIS paid, you must have a receipt with the NCF on it, as you need to declare this on the 606 (basically the 606 is a massive list of all the receipts for ITBIS paid out). The IT1 is the form which shows the amount you have billed, less the amount of receipts, with various other boxes for things like the 2% retained by credit card companies if you take payments by credit card.

If you don't have any income, just outgoings, then you "should" still file the IT1 and 606 each month. But because the DGII owes you money - basically you are going to reclaim the ITBIS that you have spent - this can be done annually. I guess this is your situation. The procedure is the same though, you have to file a 606 listing all the receipts and can only reclaim ITBIS if you have a receipt with an NCF.

On the 606 you can also add in lines for costs which don't have receipts. You are allowed to declare "Gasto Menor" costs for things like taxis and fruit that you buy from a market stall, for which you won't normally get a receipt. You also use the Gasto Menor category to declare any costs from abroad, ie things you buy online from Amazon. Note that you don't get any ITBIS back from these costs, but they are declared to reduce your profit, so they help to reduce the corporation tax that you pay. I understand that any Gasto Menor costs declared under RD$ 50,000 are allowed to go through unchallenged by DGII, anything over that level will raise questions.

You can resubmit 606's at any time provided that you are only adding non-ITBIS entries. The way we do it is that we submit the IT1 and 606 each month with only the ITBIS-relevant entries, and then at the end of the year we resubmit all the 606's including Gastos Menor, basically to hit the profit number that we want to hit. My accountant has said this is what a lot of companies do and provided that DGII sees that you are basically resubmitting the 606's to include the Gastos Menor, they are OK with it.

Hope this helps. It is quite complicated but I have got my head around it (I think).
 

MarkDR

Member
Feb 18, 2016
264
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Thanks very much Paul that was very helpful.

I do have some questions for you though.

First off I will tell you our situation.




Since we gave the DGII a pile of money in the middle of last year when we imported our first goods and paid them ITBIS (the legit value of the goods), and since we were bringing in very little pesos at the till, we put off doing any declarations until now.

We just received an e-mail from DGII saying the deadline to file our 2016 taxes is next week. So I'm jumping on my partner to get to work on this now!

So far we have input the big ITBIS we paid mid-2016 on form IT1.
That's all we have entered on it so far.

We are now filling out 606's for 2016.



... The IT1 is the form which shows the amount you have billed, less the amount of receipts, with various other boxes for things like the 2% retained by credit card companies if you take payments by credit card.

When you say "less the amount of receipts", which receipts are you talking about? The same ones you just filled out in 606?

Yes we did take payments by credit card and they did deduct 2% each time. Where exactly on IT1 do we declare this?


If you don't have any income, just outgoings, then you "should" still file the IT1 and 606 each month. But because the DGII owes you money - basically you are going to reclaim the ITBIS that you have spent - this can be done annually. I guess this is your situation. The procedure is the same though, you have to file a 606 listing all the receipts and can only reclaim ITBIS if you have a receipt with an NCF.

We basically have mostly 'outgoings'. You say the DGII owes us money. Wouldn't it be more accurate to say they keep a tally of our ITBIS credit, since they will never ever give us back this money (ITBIS)?

When you say we can only reclaim the ITBIS if you have a receipt with an NCF this is where I get confused.

Let me explain.

To me there are three forms of ITBIS:
1. ITBIS we paid when we imported our goods.
2. ITBIS we paid when we had expenses (purchases we made)
3. ITBIS that our customers paid to us.



Is the T1 ITBIS tally combined with the 606 ITBIS expenses tally?
If so, how is it done, automatically or do we combine them?

Am I correct in assuming that the 606 expenses list can be used somehow to reduce any income we have?
If so, is it dollar for dollar? Where/how do we use it, which form?

You talk about Gasto Menor which don't require documentation usually until $50,000 is reached.
We have major travel expenses. Can they be declared and if so where/how would we do it without NCF numbers (not that we have the income needed to make use of it)?
Can expenses such as these be carried over to future years if not used?
 
Feb 7, 2007
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On the forums at DGII website people advise to stay away from Gastos Menores like a devil from Holy water.

You say 50k goes unchallenged, per transaction, per month or per year?

What I also do is set away our has items with very little or small IBIS (E. G. gasoline receipts) and resubmit them in 606 at the end of year on as needed basis. In that case we just forego any small ITBIS amount the receipt may have and o my submit the subtotal and omit ITBIS. The last one or two IT1 we may do rectificación if the sum up of the additional ITBIS is worth it.
 
Feb 7, 2007
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To me there are three forms of ITBIS:
1. ITBIS we paid when we imported our goods.

You deduct this in IT1 corresponding to the month of your import, in the box that says ITBIS pagadas en importaciones

2. ITBIS we paid when we had expenses (purchases we made)

You deduct this in IT1, en box which says ITBIS pagado en servicios or in the box ITBIS pagados en compras locales

3. ITBIS that our customers paid to us.

You add this in the box ITBIS cobrado en ventas locales, and you select apropriate ITBIS % category - there are two



Is the T1 ITBIS tally combined with the 606 ITBIS expenses tally?

You submit 606 first, you separate subtotal form ITBIS,a nd then the reported ITBIS is what you will get in ITBIS credit for that month's IT1, and the subtotal is what you will get as an expense for your end of year return

If so, how is it done, automatically or do we combine them?

You enter +++'s on the IT1 and ---'s on the IT1 plus any previous balance (balance anterior a favor) and the result is your end of month balance - in your favor you do not pay anything, in favor of DGII you pay what the form says

Am I correct in assuming that the 606 expenses list can be used somehow to reduce any income we have?

Yes, the subtotal (net of ITBIS) is used to reduce your tax base. You can resubmit 606 at any time and you can see the summary of 606 totals in the oficina virtual of DGII

If so, is it dollar for dollar? Where/how do we use it, which form?
606 in Oficina Virtual, under the left-hand link which says Enviar Datos

You talk about Gasto Menor which don't require documentation usually until $50,000 is reached.
We have major travel expenses. Can they be declared and if so where/how would we do it without NCF numbers (not that we have the income needed to make use of it)?
Can expenses such as these be carried over to future years if not used?

I never used Gastos Menores (always had plenty of other legit expenses with NCF number to use instead) so I will leave this to TropicalPaul to respond

see responses above, in bold
 

MarkDR

Member
Feb 18, 2016
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Thanks very much Rubio!
...and the subtotal is what you will get as an expense for your end of year return


OK, so now I am familiar with the IT1 form and the 606 form. Is the "End of year return" done on a separate form and if so, which one is it?

I asked before if the 606 expenses list can be used to reduce any income we have. And you replied "Yes".

Can you tell me if it is dollar for dollar (or peso for peso)?
That is, for every peso that is an expense you can reduce each peso of your income?

When I asked about which form to use to reduce our income with these deductions, you mentioned:
"606 in Oficina Virtual, under the left-hand link which says Enviar Datos". I don't see anything in particular there. I just see the usual Enviar Datos when you submit your 606 forms.
 

MarkDR

Member
Feb 18, 2016
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... The IT1 is the form which shows the amount you have billed, less the amount of receipts, with various other boxes for things like the 2% retained by credit card companies if you take payments by credit card.
.


I also don't see a box to declare the 2% retained by credit card companies?
 

MarkDR

Member
Feb 18, 2016
264
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I also don't see a box to declare the 2% retained by credit card companies?




Am I correct that DGII has hidden the place to declare the 2% retained by credit card companies in box 27 where it says :pagos Computables por Retenciones (Norma No. 8-04) ?

Also where do we input our total income and total expenses for the year end to calculate any taxes owed? Thanks!
 
Feb 7, 2007
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Form IR2 is the one for end of year Tax return with its annexes. There is a new procedure now, you need to file annexes first and those annexes will automatically fill out IR2 and then you just need to reconfirm and submit IR2.
 
Feb 7, 2007
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You can also go to your local DGII office and if they are as nice as the people in Higuey they will answer your questions. Just don't overdo it with the questions.

Also if you speak and read Spanish, you can use the online DGII forum
https://ayuda.dgii.gov.do/dgii

There is a wealth of information and contributors, usually accountants and power users, sometimes DGII employees as well, are willing to help.

If you are going to do your own taxes I definitely recommend you spend hours and hours reading and searching the forum for topics related to what you need to know, now and in the future.

For example I just learned that in year 4 you can deduct only 70% of net tax as applicable loses (from the 5 year period). E.g.If you lose 500 k you can deduct 100 k per year from taxes during the next 5 years, but in the 4th and 5th year you can deduct only up to max of 70% of net tax, so if your tax is to be 100k in year 4 you can deduct the max 70k, but if your tax is to be 200k, you can deduct full 100k.just learned that on the forum over there.
 
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MarkDR

Member
Feb 18, 2016
264
9
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Speaking of accountants...
Can anyone here recommend a good accountant to do a very basic year-end business filing comprising four months of sales?
 

MarkDR

Member
Feb 18, 2016
264
9
18
What about major expenses like Fedex shipping charges and ITBIS paid for the goods?

There is documentation of course for this. But how do you claim the expenses? On the 606 form they always want to see NCF numbers. Fedex does not provide NCF numbers obviously.
 
Feb 7, 2007
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What about major expenses like Fedex shipping charges and ITBIS paid for the goods?

There is documentation of course for this. But how do you claim the expenses? On the 606 form they always want to see NCF numbers. Fedex does not provide NCF numbers obviously.

You would need to set up a local Fedex account and bill through that account. Local fedex office can provide you with the invoice with NCF on that account.