ITBIS and other taxes

This article explains how Mosce ERP applies taxes to your electronic fiscal vouchers (e-CF): which rate corresponds to which product or service, how the calculation works, and what to do when the total does not match what you expected. If you are looking for the step by step to issue an invoice or sell from the POS, see the Invoices or Point of sale (POS) articles.

Reading time: ~10 min

When to use this

This article is the right reference when:

• You are configuring Mosce ERP for the first time and need to understand how to declare your products' tax rates.
• You have questions about why the ITBIS calculated on an invoice differs from what you expected.
• You want to add a product with ISC (Selective Consumption Tax) or a special rate.
• You need to understand how withholdings are reflected on the voucher.
• Your customer asks why the invoice shows (or does not show) ITBIS.

Before you start

Before adjusting tax rates in Mosce ERP, confirm:

• The Chart of accounts is configured with the ITBIS payable accounts. If you have the Accounting module active, review Accounting settings.
• You know the fiscal regime of each customer (final consumer, ordinary regime, exempt, governmental, free zone, etc.) - the e-CF type to issue depends on this.
• The customer's RNC or cédula is registered when you issue Fiscal Credit (E31).

ITBIS - the general tax

What it is

The ITBIS (Tax on the Transfer of Industrialized Goods and Services) is the value-added tax of the Dominican Republic. The business charges it to the customer at the time of sale, reports it on the e-CF, and then declares it monthly before the DGII. The regulatory body publishes the lists of exempt goods and services, the reduced rate, and the general rate in its current regulations (available at https://dgii.gov.do).

How Mosce ERP calculates it

Mosce ERP applies the ITBIS to the subtotal of each line, after deducting any line discount:

Line subtotal = Unit price × Quantity − Line discount
Line ITBIS    = Line subtotal × (ITBIS rate ÷ 100)

The result is rounded to 2 decimals using conventional rounding (0.005 → rounds up). The voucher totals sum the ITBIS of each line and are then rounded again, following the same criterion. The e-CF's <MontoITBIS> field reflects the document's total ITBIS.

Mosce ERP never calculates the ITBIS on the total with a global discount - the invoice's global discount (if any) is applied before calculating the tax on each line.

Available rates

In Mosce ERP you configure the rate per product from Catalog → Products in the Tax rate field. The value you set there is used on every line where that product appears.

Exempt products and services

The DGII defines several categories that fall outside ITBIS. The most frequent in Dominican businesses:

• Natural non-industrialized foods (fruits, vegetables, fresh meats, fish).
• Medicines and medical equipment for human use.
• In-person educational services.
• Health services.
• Exports of goods (zero rate by destination).
• Regulated financial services.

For these products, set the rate to 0% in the catalog. The generated voucher includes them in the <ItemExento> field of the detail block.

The complete list is regulatory and may change. Verify on the DGII portal (https://dgii.gov.do) or with your tax advisor before declaring a product as exempt.

Special Regime (E44) - sale always ITBIS-exempt

What it is

The Electronic Voucher for Special Regimes (type E44) is the e-CF issued to a recipient whose transfers are exempt from ITBIS (and, where applicable, from ISC) for being covered by a special regime - for example, certain free zones, institutions, or operations with particular treatment recognized by the DGII. It is not a 0% rate sale: the operation is out of scope of the tax, marked as Exempt. (See Informe Técnico e-CF v1.0, "Comprobante Electrónico para Regímenes Especiales", on the DGII official e-CF portal).

By DGII rule, the billing indicator of the lines in vouchers of type 43, 44, and 47 must be 4 (Exempt) - that is, all lines of an E44 are exempt and the document's total ITBIS is 0 (Formato e-CF v1.0, same portal).

How Mosce ERP applies it automatically

When you sell to a customer whose default voucher type is E44 - Special Regime, Mosce ERP adjusts the document (order, quote, or point-of-sale sale) without you having to do anything manually:

• All lines become ITBIS-exempt. Each line's indicator is set to Exempt and the document's total ITBIS becomes RD$0. It is not possible to tax a line while the customer is under the Special Regime.
• The unit price is recalculated from cost using the customer's alternative margin: price = cost × (1 + margin/100). A margin captured at the line level takes priority over the customer's alternative margin (the order is: line margin → customer alternative margin → 0%).
• If a product has no cost, Mosce ERP uses its normal sale price and does not apply the alternative margin - it never leaves the price at RD$0.

Example: a product with cost RD$1,000.00 sold to a Special Regime customer whose alternative margin is 25% is invoiced at RD$1,250.00 per unit, with ITBIS RD$0.00. The same product to an ordinary customer would be invoiced at its catalog sale price, with ITBIS at 18%.

Live recalculation when changing the customer

If you change the document's customer, all lines recalculate instantly in both directions:

• Entering the Special Regime (you choose an E44 customer): the lines become exempt and their price is recalculated from cost with the alternative margin.
• Leaving the Special Regime (you choose a customer with another voucher type): the lines return to the normal sale price with their corresponding ITBIS.

A price you edited by hand on a line is respected until you change the product or the customer of that line - at which point Mosce ERP recalculates.

Exempt products in a NON-Special-Regime sale

The automatic E44 exemption is different from marking a product as Exempt in the catalog. A product exempt by its nature (see the previous section) is always exempt, regardless of the customer. The Special Regime exemption, in contrast, applies to the entire document because of the recipient's fiscal condition, not because of the product.

ISC - Selective Consumption Tax

What it is

The ISC taxes specific goods considered luxury consumption or with negative externalities. The most common in the DR:

• Alcoholic beverages (beer, wines, liquors).
• Tobacco and cigarettes.
• Fuels (gasoline, diesel, LPG).
• Motor vehicles.
• Telecommunications products (certain services).

The ISC can be:

• Specific: a fixed amount per unit of measure (e.g. RD$X per liter of alcohol).
• Ad-valorem: a percentage of the sale price.

Both modalities are possible on the same product (specific ISC + ad-valorem ISC simultaneously). The DGII publishes the rate and amount tables at https://dgii.gov.do.

How it is applied in Mosce ERP

On the e-CF, the ISC is reflected in the <ISCEspecifico> and <ISCAdValorem> fields per detail line. The voucher's printed representation also shows them separately if the voucher type is E31 (Fiscal Credit) with alcohol products, per DGII specifications.

How to add a product with ISC

1. Go to Catalog → Products and open (or create) the product.
2. In the product's tax section, enable ISC and indicate:
   • ISC type: Specific, Ad-valorem, or both.
   • Specific ISC amount (if applicable): a fixed amount per unit.
   • Ad-valorem ISC rate (if applicable): a percentage.
3. Save the product.

From this point on, each invoice line that includes this product automatically calculates the corresponding ISC and includes it on the e-CF.

Add or adjust ISC per line in an order or invoice

Beyond the ISC configured in the catalog, you can adjust or add additional taxes directly on a specific line when creating or editing an order or invoice:

1. In the Orders or Invoices form, open the line of the product that needs adjustment.
2. Click the additional taxes icon (gear or tax indicator next to the line). This opens the ISC and other taxes dialog for that line.
3. In the dialog, select:
   • ISC type - Specific or Ad-valorem (or disable it if the product is exempt for this specific sale).
   • DGII Table I code - the official code of the additional tax type (e.g. Legal Tip, CDT Telecom, Insurance, First Plate). Mosce ERP shows the description next to the code to avoid confusion.
   • Amount or rate according to the selected type.
4. Press Apply. The line updates its tax totals in real time.

Add or adjust ISC per line in the POS

In the Point of Sale, the flow is equivalent:

1. Add the product to the cart.
2. Click the product line and then the additional taxes icon.
3. Adjust the ISC or the additional tax from the same dialog.
4. Confirm. The cart subtotal updates.

If the product already has ISC configured in the catalog, the dialog appears pre-filled with those values. You only have to adjust if the specific case requires a variation from the catalog (rare - the usual thing is for the catalog to have the correct configuration).

Other selective taxes

Legal tips (10%)

For catering and hospitality businesses, the DGII allows (and in some contexts requires) including a legal tip of 10% on the invoice. In Mosce ERP this is configured at the order type or additional charge line level. The tip is not part of the ITBIS - it is a separate item on the voucher.

It applies when the business type is enabled to charge it (restaurants, hotels, bars). Consult your tax advisor if your business falls into this category.

Professional services - ISR withholding

When the buyer is a company that contracts professional services, it may be required to withhold a portion of the ISR at the time of payment. This topic is developed in the Withholdings section below.

Withholdings when you sell (they withhold from you)

When the buyer withholds taxes

Some buyers - mainly formal private-sector companies and governmental entities - are required by the DGII to withhold a percentage of the tax at the time of payment:

• ITBIS withholding (30%): when the buyer is designated as an ITBIS withholding agent, they withhold 30% of the invoice ITBIS and pay it directly to the DGII.
• ISR withholding: applicable to payments for professional services. The percentage varies by the type of service (consult the tables at https://dgii.gov.do).
• Other withholdings: special regimes by sector.

How Mosce ERP shows withholdings on the e-CF

Withholdings are recorded on the voucher in the <MontoRetencionRenta> and <ITBISRetenidoTerceros> fields as applicable. The voucher's printed representation (Printed Representation) also shows them in the totals summary so the recipient can verify the net amount payable.

When you issue an invoice with withholding, the amount receivable is the total minus what was withheld - the system indicates it clearly in the invoice detail and in the PDF.

IR-17 and withholding filing

If you operate as a withholding agent, you have to declare the withholdings you performed. Mosce ERP generates the report with the data needed to complete your withholding filing. See DGII Reports.

ITBIS and ISR withholdings on purchases (when you withhold)

This is the other side of withholding: when your business buys goods or services and, by DGII mandate, must withhold a portion of the ITBIS and/or ISR that would correspond to the supplier, pay them the net, and remit what was withheld to the DGII on the supplier's behalf. Mosce ERP calculates the withholding automatically when receiving the purchase and posts it to the accounting as a liability toward the DGII.

Who must withhold

Legal Persons (corporations) and Single-Owner Businesses designated as withholding agents are required to withhold on certain purchases. If your business is one of these and you buy from the suppliers the rule points to, the withholding applies. When you have doubts about whether your business is a withholding agent, consult your tax advisor.

What the withholding depends on

Two things determine how much is withheld:

1. Whether the supplier is registered with the DGII (formal vs. informal).
2. The supplier's taxpayer type (Individual, Legal Person, Single-Owner Business, Non-Profit Entity, State) and what you buy (goods vs. services, and what type of service).

The taxpayer type is defined in the supplier record (see Suppliers). If you do not define it, Mosce ERP infers it from the supplier's RNC or cédula to apply the corresponding rates.

Case 1 - Informal supplier (not registered with the DGII)

When you buy from someone who is not registered with the DGII, your business issues the voucher on their behalf: an electronic Purchase Voucher (e-CF type 41, "E41") that you generate yourself. In this case:

• 100% of the ITBIS is withheld - both on goods and services. The rule admits no exception: on purchases from informal suppliers the full ITBIS is withheld. (See Norma General 05-2019 on the Purchase Voucher, in the DGII general rules section.)
• Services: in addition to the ITBIS, ISR is withheld according to the type of service:
  • Fees / professional services: 10%.
  • Technical services (masonry, plumbing, painting, cleaning, and similar): 2%.
• Goods: the ITBIS is withheld but ISR is not withheld.

(The ISR withholding rates come from Norma General 07-2007, available in the DGII general rules section.)

Case 2 - Formal supplier (registered with the DGII)

When the supplier is registered, the withholding depends on their taxpayer type and on what you buy:

A Single-Owner Business withholds the same as an Individual - that is why the supplier record includes that option separately (see Suppliers).

The 30% ITBIS withholding on professional and liberal services or rental of movable goods between Legal Persons is established by Norma General 02-2005 (see the DGII general rules section). The purchase of pure goods from a formal supplier does not generate withholding.

How it looks when receiving the purchase

When you receive the merchandise or service, before confirming, Mosce ERP shows you a withholding preview: the estimated ITBIS and ISR that will be withheld according to the supplier type and what you buy. This way you know in advance how much the supplier will be paid net. The step by step is in Purchases.

Where the withheld amounts go

What is withheld is not paid to the supplier: it is a debt of your business toward the DGII until you remit it. Mosce ERP automatically posts it as a liability in two accounts:

• ITBIS Withheld from Third Parties.
• ISR Withheld from Third Parties.

The supplier is paid the net (total minus what was withheld). The detail of how these accounts are mapped is in Accounting settings.

When each withholding is recognized

• ITBIS: always when receiving / invoicing the purchase. It is not configurable.
• ISR: the timing is configurable in the accounting settings - it can be recognized on invoicing / receiving or on payment to the supplier. By default it is recognized on payment. This lets you reflect the ISR liability when you record the invoice or when you actually pay the supplier. See Accounting settings.

How it is declared to the DGII

Each month, the withholdings performed are reported to the DGII:

• The 606 Form (Purchases of Goods and Services) includes, for each reportable purchase, the columns for ITBIS Withheld, the type and amount of ISR withholding, and the payment date to the supplier.
• The IR-17 report (ISR withholdings from third parties) summarizes monthly the ISR withheld for each beneficiary.

Both are generated by period from Fiscal → DGII Reports. See DGII Reports.

How Mosce ERP decides which taxes to apply

Mosce ERP uses three configuration levels to determine each line's tax:

1. Per-product configuration

The ITBIS rate, the ISC, and the exemptions are configured directly on each catalog product (Catalog → Products → Tax rate field). This is the base level - if the product has a configured rate, that rate is used by default on all invoices that include it.

2. Per-customer configuration (e-CF type)

The voucher type selected when invoicing determines the fiscal treatment of the entire document:

If the type is E46 (Export), Mosce ERP applies a 0% rate to the entire document regardless of the rate configured per product.

3. Global rates (rate catalog)

From Configuration → Tax rates you can manage the ITBIS rates available to assign to products (18%, 16%, 0%). If you need to add a new or special rate authorized by the DGII, it is created here first and then assigned to the corresponding products. The required permission is settings:write.

Common errors

Frequently asked questions

Does Mosce ERP calculate the ITBIS on the total with a global discount or on each line's subtotal?

On each line's subtotal (price × quantity − line discount). A global discount at the invoice level is applied by distributing it proportionally among the lines before the tax calculation.

Can I have products at 18% and exempt products on the same invoice?

Yes. Mosce ERP calculates the tax per line independently. The e-CF will include the detail of each line and the document's total ITBIS sums only the taxed lines.

What is the difference between a 0% rate and exempt?

Fiscally they are different: the 0% rate applies the tax but at a zero rate (export is the typical case). "Exempt" means the good or service is not subject to the tax. In Mosce ERP, both result in <MontoITBIS>0</MontoITBIS> per line, but the e-CF type or the product category determines which one applies. Consult your tax advisor to choose the correct classification.

Do withholdings affect the e-CF amount or only the collection?

Withholdings do not reduce the e-CF amount. The voucher reflects the full total of the operation. What changes is the net amount to collect: total − withholding performed. Mosce ERP shows the breakdown in the invoice detail.

Can I change a product's tax rate on already-issued invoices?

No. The change in the catalog applies to future invoices. Already-issued invoices keep the rate they had at the time of issuance. If you need to correct an issued invoice, issue a Credit Note (E34) and invoice again with the correct rate.

Related

• Invoices - issue an electronic fiscal voucher.
• Point of sale (POS) - counter sales with automatic e-CF assignment.
• Accounting settings - mapping of the ITBIS payable account.
• DGII Reports - generation of 606, 607, 608, IR-17 reports and filings.
• Purchases - withholding preview when receiving and net payment to the supplier.
• Suppliers - supplier taxpayer type and why it affects the withholding.
• Printed representation and QR - how taxes are presented on the voucher PDF.