Selling From a Dominican Free Zone Into the Local Market: The 3.5% Tax and the Monthly RZF-01 Filing

The tax exemption of a Dominican free zone ends at its fence. A company operating under Free Zones Law 8-90 pays essentially nothing on what it exports, and a very specific set of taxes the moment it sells into the local market.

The reporting framework dates to 2011, when the tax authority’s General Norm 5-2011 required free zone companies to file a monthly sworn statement separating export sales from local-market sales, and to pay a levy, then 2.5%, on the latter. The 2012 fiscal reform, Law 253-12, raised that rate to 3.5% of gross local sales, where it stands today. The 3.5% works as a presumptive income tax: instead of the 27% corporate rate on profits, the company pays a flat percentage of local revenue, declared monthly on form RZF-01 by the 15th of the following month.

That is not the whole bill. Local sales also carry ITBIS and, where applicable, excise tax, under the mechanics of DGII General Norm 01-2014, with the free zone company acting as withholding agent and invoicing with a valid fiscal receipt (NCF). The annual IR-2 return remains due, informatively, even when all income is exempt. And these are formal duties in the strict sense: a missed filing is sanctionable under the Tax Code even in a month with modest sales.

The error we see most often is treating the free zone permit as a blanket. It is not. The exemptions attach to the export operation; every local transaction, a sale of surplus inventory, a service to a Dominican client, triggers the parallel regime, and the DGII cross-checks the 3.5% filings against ITBIS data.

One more reason to keep the file clean: the June 2026 fiscal reform, Law 30-26, put all special regimes under closer watch, requiring cost-benefit studies for new incentive classifications and barring the stacking of incentive regimes on the same operation. Free zone status remains one of the country’s strongest tools for nearshoring investment, but it is being audited like one.

Before quoting a local client, quantify the real tax cost. Our free zone and tax lawyers in the Dominican Republic can model the 3.5%, the ITBIS mechanics and the paperwork so the margin you quote is the margin you keep.

Do you want more information about Dominican Free Zones Sales Tax Filing and Payment advisory services? 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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