Verified Facts
The tax rates in the Dominican Republic range from 0% to 25% for individual income tax, with a corporate tax rate of 27% and a value-added tax (VAT) rate of 18%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
The Dominican Republic has a territorial tax system, which means that only income earned within the country is subject to taxation. However, individuals who are considered tax residents may be subject to worldwide taxation, meaning that their global income is taxable in the Dominican Republic. To be considered a tax resident, an individual must have a permanent home in the country, spend more than 182 days in the country in a calendar year, or have a center of economic interest in the country.
The tax system in the Dominican Republic is relatively complex, with various laws and regulations governing different types of income and activities. The tax authority, known as the Dirección General de Impuestos Internos (DGII), is responsible for collecting taxes and enforcing tax laws. Taxpayers are required to register with the DGII and obtain a tax identification number (RNC) in order to file tax returns and pay taxes.
Personal Income Tax
| Income Bracket (DOP) | Tax Rate |
|---|---|
| 0 - 416,220 | 0% |
| 416,221 - 624,330 | 15% |
| 624,331 - 867,120 | 20% |
| 867,121 - 1,242,000 | 22% |
| 1,242,001 and above | 25% |
| The tax rates in the Dominican Republic are progressive, with higher income brackets subject to higher tax rates. Taxpayers are entitled to various deductions and allowances, including a personal exemption, a deduction for mortgage interest, and a deduction for charitable donations. Tax returns must be filed annually, and taxpayers are required to pay taxes on their worldwide income if they are considered tax residents. |
Corporate & Business Tax
- The corporate tax rate in the Dominican Republic is 27%, which applies to the taxable income of companies.
- Small businesses with annual revenues of less than DOP 5 million are eligible for a reduced tax rate of 15%.
- Companies operating in free zones are exempt from corporate tax, as well as other taxes and duties.
- Companies are required to register with the DGII and obtain a tax identification number (RNC) in order to operate in the country.
- Companies are also required to file annual tax returns and pay taxes on their taxable income.
VAT / Sales Tax
- The standard VAT rate in the Dominican Republic is 18%, which applies to most goods and services.
- A reduced VAT rate of 13% applies to certain basic necessities, such as food and medicine.
- A reduced VAT rate of 0% applies to exports and other international transactions.
- Tourists are eligible for a tourist refund scheme, which allows them to claim a refund of VAT paid on certain purchases.
For Expats & Foreign Workers
- Expats and foreign workers are considered tax residents if they spend more than 182 days in the country in a calendar year.
- Tax residents are subject to worldwide taxation, meaning that their global income is taxable in the Dominican Republic.
- The Dominican Republic has double taxation treaties with 45 countries, which help to prevent double taxation and fiscal evasion.
- Expats and foreign workers are required to register with the DGII and obtain a tax identification number (RNC) in order to file tax returns and pay taxes.
- Expats and foreign workers are also required to contribute to the social security system, which provides benefits such as healthcare and pension insurance.
- Remittances from abroad are subject to a withholding tax of 10%, which is withheld by the payer.
Crypto & Investment Income
- Investment income, such as dividends and interest, is subject to a withholding tax of 10%, which is withheld by the payer.
- Capital gains are subject to a tax rate of 15%, which applies to the gain realized on the sale of assets.
- Cryptocurrency is considered a foreign currency for tax purposes, and gains realized on the sale of cryptocurrency are subject to capital gains tax.
- Taxpayers are required to report their investment income and cryptocurrency transactions on their tax returns, and to pay taxes on their taxable income.