Income tax considerations in the Dominican Republic
Income Tax is the tax levied on the income, profit or revenue obtained either by individuals or corporations in a given fiscal period.
It is collected through the Tax Administrations, in the case of the Dominican Republic through the General Directorate of Internal Taxes (DGII). The purpose of this article is to present the main considerations of the Income Tax in this country.
Who are subject to the tax?
Title II of the Tax Code establishes that taxpayers subject to the annual income tax are individuals, legal entities and undivided estates.
What type of income is subject to income tax?
Taxpayers domiciled in the country will be subject to the tax, for their income from Dominican source and those coming from investments and profits from abroad.
However, in the case of a non-resident taxpayer, only the income from Dominican source will be taxed.
Among the main taxable income from Dominican source are the following:
- Those coming from capital or rights economically used in the Dominican Republic.
- The one coming from a commercial, industrial or similar activity in the country.
- Those derived from personal work in the country.
- Those derived from technical assistance services, whether rendered in the country or abroad.
- Those derived from leasing.
Are there subjects that are exempted from the tax?
The income of the State, municipalities, municipal districts, chambers of commerce, religious institutions, among others, are exempt from the tax.
What is the Income Tax rate?
In the case of legal entities or corporations, the tax rate is 27%. For individuals, the tax will result from applying a rate of up to 25% on their net income in a progressive manner depending on the income obtained.
What is the form and term for the presentation and payment of the tax?
It will be possible to file the Income Tax Affidavit, both for individuals and legal entities, through the Virtual Office by logging in with the taxpayer’s user name and password. There you will find the Forms menu in which you will find the Interactive Declaration option and you must choose the corresponding one and fill it out.
Regarding the deadline for the filing and payment of the IR-1 Individual Income Tax Return, the deadline will be March 31 of the following year.
On the other hand, in the case of the sworn income tax return for legal entities IR-2, it must be filed up to 120 days after the fiscal year end.