By Joan G. Feliz
Special for El Inmobiliario
Electronic invoicing, established by Law 32-23, has become one of the most significant and disruptive changes in the Dominican Republic's tax structure. Its implementation is not only intended to improve tax efficiency and transparency in collection, but it also presents significant challenges for key sectors of the economy, including the construction and real estate sector. While this measure aims to reduce informality and facilitate transaction traceability, its implementation is forcing companies to adapt to new operational, administrative, and technological realities.
The transition process: from theory to practice
Electronic invoicing began its phased implementation in 2024, starting with large taxpayers. By 2025, it is estimated that virtually all stakeholders in the real estate and construction sector will be required to comply with this regulation. This will include property developers, contractors, real estate agents, project developers, and other parties involved in the property lifecycle.
According to the Dominican Republic's Internal Revenue Service (DGII), by the end of 2024, more than 450 million electronic tax receipts had been issued, reflecting an 86% increase compared to the previous year. However, the real estate and construction sector has historically been characterized by its low level of digitalization, which places these sectors in a particularly vulnerable position regarding the deadlines and requirements of the new regulations.
The immediate impact: greater fiscal control and the eradication of informality
One of the most significant benefits of electronic invoicing is the increased control the DGII (General Directorate of Internal Revenue) will have over commercial transactions, especially in a sector like construction, where there has historically been a large amount of informal activity. Real estate sales and construction contracts will now be much easier to track and audit, allowing tax authorities more direct access to companies' income and expenses.
In the long term, informality in payments, which has been a persistent challenge in this sector, could be significantly reduced. Businesses that previously relied on practices such as manual receipts or cash payments without formal record-keeping will now be required to record every transaction electronically, ensuring greater transparency in processes and enabling more effective control of financial operations.
However, this control implies that companies will be forced to maintain more rigorous tax management, which could result in additional costs related to the implementation of new accounting systems and staff training.
Technological challenges: the cost of digitization
The main barrier facing the construction and real estate sector is a lack of technological preparedness. While some large companies already operate with ERP (Enterprise Resource Planning) management systems that facilitate the adoption of electronic invoicing, medium and small businesses have had difficulty integrating the required solutions.
Adapting to electronic invoicing involves implementing specialized accounting software and training staff to ensure that transactions are issued and processed efficiently and legally. In many cases, the initial implementation costs and the adaptation of IT systems can be prohibitive for companies operating on narrower profit margins.
For smaller companies managing smaller projects or in a growth phase, these initial digitization costs represent a significant barrier. Adopting new technologies involves not only software expenses but also a structural shift in how companies manage their daily operations, which can generate resistance to change within organizations.
Restructuring of payment flows and billing in construction
In the construction industry, one of the biggest challenges lies in managing installment payments and advances. Often, real estate transactions or construction projects are carried out in several phases. This is particularly common in real estate projects, where payment is made in different stages (pre-sale, down payment, progress payment, etc.).
Electronic invoicing requires that all these transactions be properly recorded, which implies a change in how companies manage their revenue. Construction companies that typically issued grouped or out-of-sequence invoices must now adopt a more organized and structured invoicing system, which entails adjustments to payment flows and financial planning.
This adjustment can be complicated for companies that lack a robust accounting structure, and even more so for those operating with a high volume of daily transactions. Furthermore, non-traditional payments, such as those related to real estate purchases through joint ventures or trusts, must also be managed electronically, requiring constant updates to administrative procedures.
Opportunities in the formalization of the sector
Despite the challenges mentioned, electronic invoicing also presents significant opportunities for the real estate and construction sector. The control and traceability of transactions will allow for greater formalization of activities in the sector, which could facilitate access to financing. Financial institutions will value the transparency and accuracy of tax data, which could generate greater credit opportunities for companies that adopt the regulations.
Similarly, electronic invoicing can improve a company's reputation, especially among real estate buyers seeking legal certainty and transparency in transactions. Real estate developers who successfully integrate this tool with their sales and property management platforms can offer their clients significant added value in terms of security and operational efficiency.
The path to full digitization
By the second half of 2025, it is expected that over 90% of companies in the real estate and construction sector will have fully migrated to the electronic system. During this transition process, the role of the General Directorate of Internal Taxes becomes crucial, as a strengthening of automated audits and greater coordination with other regulatory bodies, such as the Property Registry, are expected, with the goal of ensuring that companies comply with the new regulations.
In this sense, automated tax auditing will be a key tool to ensure compliance with tax obligations, and will also allow the authorities to identify irregular or underreported income transactions, which will generate higher revenues for the State and reduce tax gaps.
Conclusion: An inevitable change
Electronic invoicing represents a turning point for the real estate and construction sector in the Dominican Republic. While challenging in the short term, this change offers significant long-term benefits in terms of transparency, formalization, and competitiveness. Companies that adapt quickly to this new regulation by investing in appropriate technological systems and training their staff will be better positioned to face future challenges and take advantage of the tax and operational benefits that electronic invoicing offers.
Those that delay adaptation could face penalties, lost business opportunities, and a shrinking customer base, potentially jeopardizing their market competitiveness. The future of the real estate and construction sector is defined by digitalization, and those who take the initiative now will lead the industry in the coming years.
The author is an MBA, a digital marketing specialist, and the operations manager of the construction company Incaribe, with more than 10 years of experience in the construction and tourism sector.
