Income tax considerations in the Dominican Republic

Income Tax Considerations in the Dominican Republic

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Income Tax levies the income, profit or revenue obtained either by individuals or corporations in a given fiscal period.

It is levied through the Tax Administrations, being done by the Dirección General de Impuestos Internos – DGII (General Directorate of Internal Taxes) in the Dominican Republic. This article displays the main considerations of the Income Tax in the mentioned country.

Who is 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 sources and those from investments and profits from abroad.

However, for non-resident taxpayers, only the income from Dominican sources will be taxed.

Among the main taxable income from Dominican sources are the following:

  • Those coming from capital or rights economically used in the Dominican Republic.
  • That one coming from a commercial, industrial, or similar activity in the country.
  • Those derived ones from personal work in the country.
  • Those coming from technical assistance services, whether rendered in the country or abroad.
  • Those coming from leasing.

Are there subjects that are exempted from the tax?

The income of the State, municipalities, municipal districts, commerce chambers, religious institutions, among others, are exempt from the tax.

What is the Income Tax rate?

The tax rate is 27% for legal entities or corporations. For individuals, the tax will be 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, whether individuals or legal entities, through the Virtual Office by logging in with the taxpayer’s username and password. There you will find the Forms menu where the Interactive Declaration option will be found, choosing the corresponding one and filling it out.

Regarding the deadline for the filing and payment of the Income Tax Affidavit for Individuals, the deadline will be up to March 31 of the following year.

On the other hand, the Income Tax Affidavit for legal entities must be filed up to 120 days after the fiscal year-end.

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