Dominican Republic levies VAT on foreign e-commerce

Thu 28th Aug 2014

Online purchases by Dominican Republic consumers are now liable to Value Added Tax at 18% for the first time when bought on foreign websites.

Previously, there had been a $200 VAT free threshold for online purchases, which compares to the European Union’s less than Euro 20. This has now been withdrawn. Such acquisitions will also now be liable to the appropriate import duties too.

The moves comes as other countries which have high foreign online VAT thresholds, e.g. Australia, reconsider their positions. This comes largely from local retailers who believe they face unfair tax competition from powerful foreign online retailers such as Amazon.