Dominican Taxes for Foreign Investors in 2026: Rates, Withholdings and the Country’s Tax Treaties

A foreign investor modeling a Dominican venture needs five numbers before anything else: the corporate rate, the capital gains rate, the dividend withholding, the VAT, and what, if anything, a tax treaty gives back. Here is the current map, updated for the sweeping 2026 reform (Law 30-26).

Corporate income tax

Companies pay income tax at a flat 27% on net taxable profit. The base is Dominican-source income plus foreign-source investment and financial income. Losses may be carried forward for five years, and the usual deductions apply, depreciation, interest, and management fees or royalties, the latter deductible only if arm’s-length and after withholding taxes are paid; thin capitalization limits also apply. Under Law 30-26, companies with annual revenue above RD$1,000 million face a temporary 30% rate for fiscal years 2026 through 2028.

Capital gains

Capital gains are generally taxed at 27%, computed on the sale price minus the inflation-adjusted cost basis. A major novelty of the 2026 reform: a preferential 10% rate now applies to capital gains on the transfer of real estate under the newly introduced rules, a change that reshapes exit planning for property investors and real estate holding structures.

Withholding taxes

Dividends carry a definitive 10% withholding. Payments abroad of Dominican-source income are generally subject to withholding at the corporate rate, but Law 30-26 reduced the rate to 15% for several categories of payments to non-residents, including software licenses, online advertising and data services, royalties and similar rights, as a final tax. Rental payments to individuals are now withheld at 15%. Domestic payments to individuals attract withholdings at varying rates depending on the income type.

ITBIS and other taxes

ITBIS, the Dominican VAT, applies at a standard 18% (with a reduced rate for certain goods), while exports and qualifying services rendered to non-residents and consumed abroad are zero-rated; exporters with sustained ITBIS credits may seek reimbursement or offset. A 1% asset tax applies over balance-sheet assets, creditable against income tax, in practice a minimum tax. Issuing or increasing the capital of a Dominican company costs 1% of the amount contributed.

Treaties

The treaty network remains narrow: full double taxation agreements with Canada and Spain, plus a tax information exchange agreement with the United States. For most investors, structuring, not treaty shopping, is where Dominican tax planning is actually won.

Arthur & Castillo’s tax practice advises foreign investors on inbound structuring, treaty positions and compliance before the DGII. Before you wire the first dollar, let us pressure-test the tax model.

Do you want more information about our Tax Advisory Services in the Dominican Republic? Contact Us.

ABOUT THE AUTHOR: Maria Arthur Rodger is a Partner leading the Private Client, Successions and Tax areas at Arthur & Castillo Advisers and Consultants in the Dominican Republic. She specializes in private client, successions, tax, real estate valuation and advisory (Master in Tax and Finance Studies from Georgetown University in Washington, D.C. & Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience. She is also a Certified Public Accountant (CPA), Certified Valuator, Business Bankruptcy Expert and English and Spanish Interpreter.

Email: marthur@aclaw.com

Disclaimer: This publication is not intended to provide advice or suggest a guaranteed outcome as individual situations will differ and the situation may have changed since publication. For specific advice on the information provided and related topics, please contact the author.

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