The most common deductions are depreciation, tax expense, interest expense, and management and service fees or royalties. The last two are deductible if they comply with the arm’s-length principle and the corresponding withholding taxes have been paid. Related-party transactions are subject to transfer pricing rules and the annual information return (DIOR), and the DGII applies thin-capitalization limits to interest deductions.

Advance payments (anticipos) were restructured by Law 30-26 with effect from fiscal year 2027: microenterprises and the agricultural sector are exempt, small businesses pay in three annual installments, and medium and large companies whose effective tax rate is 1.5% or less must advance 1.5% of gross income.

Taxpayers with pending liabilities should evaluate the Law 30-26 amnesty, open until December 31, 2026; the same law cut monthly late-payment surcharges from 10% to 3%, capped at 100% of the tax due, and eliminated the pay-first (solve et repete) requirement for challenging assessments.

II. Capital Gains

For legal entities, capital gains are taxed as ordinary income at the 27% rate. The gain or loss is the transfer price less the acquisition cost of the asset adjusted for inflation under local rules, decreased by depreciation and increased by improvements (Art. 289, Law 11-92). Capital losses exceeding capital gains in a period may be credited only against future capital gains.

Law 30-26 introduced a flat 10% rate for capital gains obtained by individuals on the sale of real property. The gain is exempt if the proceeds are fully reinvested in a new principal residence within six months (proportionally exempt if partially reinvested), and gains from the sale of the principal residence by persons aged 65 or older are exempt. The reform also expressly brought digital assets and crypto-assets within the Tax Code’s definition of capital assets.

For real estate held through companies, the applicable rate and structure should be reviewed under the new Law 30-26 provisions before any disposition; the individual 10% regime does not automatically extend to entity-level sales.

III. Asset Tax

The asset tax is levied at 1% on the assets shown on the balance sheet, after depreciation and other allowed deductions. Equity investments in other companies and rural real estate are excluded. The tax is payable in two installments and operates as a minimum tax creditable against income tax: if the income tax liability equals or exceeds the asset tax, no asset tax is payable.

IV. Withholding Taxes

Dividend and profit distributions are subject to a final 10% withholding tax (Art. 308, Law 11-92). Payments abroad of Dominican-source income to non-residents are generally subject to a 27% withholding, with interest subject to 10%. Law 30-26 (effective June 18, 2026) created a reduced 15% final withholding on payments abroad for software licenses, online advertising, and data storage or cloud services.

Payments of taxable income to resident individuals are subject to withholding at progressive rates of up to 25% under the scale in force through 2026 (annual exemption of RD$416,220). From fiscal year 2027, Law 30-26 replaces this with a new inflation-indexed scale: an annual exemption of RD$480,000 and brackets rising to a top marginal rate of 27% (Art. 296, Law 11-92, as amended by Art. 10, Law 30-26).

Any Dominican company paying foreign SaaS, cloud, or digital advertising providers became a withholding agent for the new 15% tax on June 18, 2026, with no transition period; accounts payable processes should be updated immediately.

V. Tax on the Transfer of Industrialized Goods and Services (ITBIS)

Imports and supplies of goods and services in Dominican territory are subject to ITBIS, the Dominican value-added tax, at a standard rate of 18%, with a reduced 16% rate for a basket of specified goods (certain dairy derivatives, coffee, edible fats and oils, sugars, and cocoa products) and exemptions for listed goods and services.

Exports of goods are zero-rated, as are services rendered to non-domiciled persons, invoiced abroad, and consumed outside Dominican territory. ITBIS paid on imports and to local suppliers is creditable, and excess credits carry forward to subsequent monthly periods. Exporters holding ITBIS credits for more than six months may request reimbursement or offset against other taxes.

Law 30-26 left the ITBIS rate and base unchanged, but created a customs-level ITBIS collection (percepción) for importers not registered as taxpayers, applied on the import base plus a deemed 30% value added, creditable upon later formalization before the DGII.

Electronic invoicing (e-CF) under Law 32-23 is becoming mandatory in phases; ITBIS credits are increasingly conditioned on properly issued electronic vouchers.

VI. Issuance Tax

The tax on the incorporation of companies and on capital increases is 1% of the amount contributed (Art. 9, Law 173-07) (see Business Companies, section II).

VII. Tax Treaties

The DR has comprehensive double-taxation agreements with Canada (1976) and Spain (2011), and a tax information exchange agreement with the United States (1989), complemented by a FATCA intergovernmental agreement. The treaty network remains narrow; most cross-border flows are governed by domestic withholding rules.

Because treaty relief is the exception rather than the rule, cross-border structures into the DR should be stress-tested against domestic withholding rates and the new Law 30-26 rules on foreign-source income of residents before assuming any reduced rate.

This publication is provided for informational purposes only and not as legal advice. Any transaction related to any of the described aspects shall require advice and be specifically consulted with the Firm in advance. © Arthur & Castillo. All Rights Reserved. Next