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Dominican Republic’s Tax System – Country Profile

Dominican Republic’s tax system is structured to balance the country’s need for revenue with the encouragement of foreign and local investment. It comprises various taxes, including Corporate and Personal Income Taxes, Inheritance and Gift Taxes, with the notable absence of a Wealth Tax. Underlying these taxes is the Territorial Tax Regime, which taxes income based on its source within the country, regardless of the taxpayer’s residence, domicile, or nationality. This system is designed to foster a favorable business environment while aligning with international standards and agreements, such as the OECD guidelines and Double Tax Treaties with countries like Canada and Spain.

Tax overview

Corporate Income Tax: 27%
Personal Income Tax: 25%, progr.
Inheritance Tax: 3%
Gift Tax: 27%
Wealth Tax: None

Territorial Tax Regime

The Dominican Republic applies the tax principle of territoriality. Income tax is levied principally on local source income, regardless of the residence, domicile or nationality of the taxpayer. 

Corporate Income Tax

Corporations incorporated in the Dominican Republic are subject to tax on local source income, at a rate of 27%.

Personal Income Taxation

Residents of the Dominican Republic are subject to tax on local source income at progressive rates up to 25%. However, residents are subject to tax on foreign source investment and financial income.  The Dominican Republic imposes gift tax at 27%, and inheritance tax at 3%. However, there is no wealth tax.

Anti-Avoidance Rules

The Dominican Republic applies the doctrine based on substance over form. Additionally, the Dominican Republic applies Transfer Pricing rules based on OECD guidelines, as well as Thin Capitalization rules. However, the Dominican Republic does not have Controlled Foreign Corporation (CFC) rules. 


The Dominican Republic recognizes trusts (“Fideicomisos”) created under domestic law, which have a legal and tax framework.

Double Tax Treaties (DTTs) 

The Dominican Republic has DTTs with Canada and Spain.

Tax Information Exchange Agreement

The Dominican Republic has a Tax Information Exchange Agreement (TIEA) with the United States.

OECD Multilateral Convention 

The Dominican Republic has ratified the OECD Convention on Mutual Administrative Assistance in Tax Matters. Signatories are required to exchange information “on request,” and may agree to exchange information automatically and spontaneously.

Common Reporting Standard (CRS)

The Dominican Republic has not signed the Multilateral Competent Authority Agreement (MCAA) to implement CRS for the automatic exchange of information, and has not committed to join CRS. 


The Dominican Republic has a FATCA Model 1 IGA with the United States, for the automatic exchange of account information.

In conclusion, the Dominican Republic’s tax system offers a clear framework for both individuals and corporations operating within its borders. By focusing on local source income and implementing anti-avoidance measures, the country ensures a fair taxation environment. Additionally, its engagement in international agreements and treaties, like the TIEA with the United States and the OECD Convention, demonstrates its commitment to global tax cooperation and transparency. Despite not participating in the CRS, the Dominican Republic’s tax regime remains a critical component of its economic infrastructure, promoting fiscal responsibility and attracting investment.

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Dominican Republic's tax system

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