Taxation in the Dominican Republic

Dominican tax law is primarily territorial. In principle, the Dominican Republic only collects taxes on income from Dominican sources. On the other hand, income derived from work done outside of the Dominican Republic is not taxable, even if received by Dominican nationals or companies, foreign individuals residing in the Dominican Republic or foreign companies with branches in the country. For tax purposes, any person residing in the Dominican Republic for more than 182 days in a continuous 12-month period is considered a resident. It is mandatory for all taxpayers to register with the Internal Revenue Agency and obtain a tax number RNC.

Real Estate Tax

What taxes and fees are involved when acquiring property in the Dominican Republic? There is a one time transfer tax of 3%. Lawyer fees are approximately 800 USD – 1% of the purchase price of the property.

A 1% annual tax is assessed on real estate properties owned by individuals, based on the cumulative value  of all the properties as appraised by government authorities. Properties are valued without taking into consideration any furniture or equipment to be found in them. For built lots, the 1% is calculated only for values exceeding  RD$7,438,197 DOP (about $150,000). For unbuilt lots, the 1% tax is calculated on the actual appraised value without the exemption.

The real estate tax is payable every year on or before March 11, or in two equal instalments: 50% on or before March 11, and the remaining 50%, on or before September 11. The amount of the exemption is adjusted annually for inflation. The following properties are exempt from paying real estate tax: (a) farm properties; (b) homes whose owner is 65 years old or older, and has no other property in his or her name; and (c) properties owned by companies, which pay a separate tax on their company assets.

Tax on Corporate Assets

Companies pay an annual 1% tax on company assets. However, the amount of tax on assets paid by a company can be applied as a credit toward its income tax obligations.

Property Tax (IPI) – https://dgii.gov.do