Taxes in the Dominican Republic for legal and natural persons

What taxes are paid by natural persons and legal entities in the Dominican Republic: tax system nuances, natural persons' taxation, legal entities' liabilities, professionals' assistance.
Taxes in the Dominican Republic
The Dominican Republic attracts foreigners with its loyal policy towards investors and the opportunity to make profitable investments in the tourism industry. Therefore, international companies are often opened here, adn their founders move to the country for permanent residence with their families. But before that, it is necessary to carefully analyze what taxes are paid in the Dominican Republic and when these obligations come.
Fiscal system: aspects and nuances
In the Dominican Republic, all payments in favour of the State are made according to territories - everyone receiving income on the lands of the Republic must make contributions.

This rule is relevant for individuals and companies. Residents of the country also make payments from profits earned abroad. This status is automatically granted to those who live in the country for more than 6 months per year. After receiving a residence permit, foreigners are exempt from payments from foreign income for another three years.
Liabilities of private taxpayers
Income tax in the Dominican Republic is calculated on a progressive scale, depending on the amount of profit in the local pesos:

  • less than 290 000 – 0%;
  • up to 435 000 – 15%;
  • up to 604 000 – 20%;
  • more than 604 000 – 25%.

The tax period is a year from the first of April to the first of April. Within the same period the payment shall be made.
Liabilities of firms and corporations
A simple and clear framework has been developed for legal entities in the country. The list of mandatory taxes includes:

  • income tax – 25%;
  • assets tax – 1%;
  • capital increase tax – 25% of the difference between the nominal and selling price;
  • VAT – 16% (for a number of products the rate is 0%);
  • excise duty.

The latter type of deductions is established for a wide range of goods and is paid by all residents of the Republic, regardless of their status.

Companies, as well as ordinary residents and foreigners, must pay interest on real estate transactions. It applies to properties worth over 5,000,000 pesos and is 1% of the amount. For other real estate transfers, the interest will be 3%. However, the government has established zero rates for people over 65 years.

If you have any questions about the fiscal system of the republic, please contact our specialists. They will promptly give answers and give free advice on other topics.

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