Dominican Republic legal and accounting and tax considerations in 2024

1. Corporate tax in Dominican Republic is imposed at a standard rate of 27%. All legal entities in must register for tax with the Dominican Internal Revenue Authority (DGII) and file annual tax returns within 120 days following the end of the fiscal year;
2. Capital gains is taxed at the normal corporate income tax rate of 27% applicable on the sale of assets, shares or real estate;
3. The current Value Added Tax (VAT) in Dominican Republic is levied at a standard rate of 16%. Companies must register for VAT at registration and file monthly returns by 20^th day of the following month;
4. A 10% withholding tax is applicable of i) dividends and ii) interests, remitted to both non-resident and resident companies in Dominican Republic;
5. A 28% withholding tax is applicable on i) royalties and ii) technical services fees paid to non-resident companies. Branches of foreign companies are subject to a 10% withholding tax on dividends remitted abroad;
6. Other taxes in the Dominican Republic include i) 28% withholding tax on management fees paid to non-resident companies ii) capital duty of 1% of the company’s authorized capital, charged at incorporation iii) 1% monthly payroll tax paid to INFOTEP iv) 3% property transfer tax;
7. Business losses in Dominican Republic can be carried forward for up to 5 years. Newly established entities however must fully deduct in the 2^nd year, the losses made in the first year of operation. A carryback of losses is not permitted;
8. The Dominican Republic has only signed 1 double tax treaty with Canada to help reduce double taxation and to promote business cooperation between the two countries;
9. Healy Consultants will assist the Client with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
10. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.