Dominican Republic Cross-Border Tax Guide 2026

Withholding Tax Rates

Payments from Dominican sources to non-residents are subject to withholding tax (WHT) at the following standard rates, which may be reduced under applicable DTTs:

• Dividends: 10% (0% if shares held >1 year)
• Interest: 10%
• Royalties: 27%
• Technical service fees: 27% (may be recharacterised as royalties)
• Directors' fees: 27%
• Rental income: 10% (gross rental payments to non-residents)

The reduced rates under DTTs typically require the non-resident to provide a Certificado de Residencia Fiscal (tax residency certificate) from their home jurisdiction and complete the applicable DGII forms.

Double Taxation Treaties (DTTs)

The Dominican Republic has over 12 double taxation treaties in force. Key treaty partners include:

• Canada: Dividends 5-15%, interest 10%, royalties 10-18%
• Spain: Dividends 5-10%, interest 5-10%, royalties 10%
• Chile: Dividends 5-15%, interest 5-10%, royalties 10-15%
• South Korea: Dividends 5-15%, interest 10%, royalties 10%
• EU countries: Various terms with EU member states
• CARICOM: Trinidad and Tobago, Barbados, Jamaica, and others

Treaties generally follow the OECD Model Convention and provide for the elimination of double taxation through the exemption or credit method.

Transfer Pricing

The Dominican Republic has transfer pricing rules aligned with OECD guidelines. Related-party transactions must be conducted at arm's length. Taxpayers with related-party transactions exceeding certain thresholds must file an annual transfer pricing report (Declaración Informativa de Precios de Transferencia) and maintain contemporaneous documentation. The acceptable methods include:

• CUP: Comparable uncontrolled price method
• RP: Resale price method
• CP: Cost-plus method
• PSM: Profit split method
• TNM: Transactional net margin method

Permanent Establishment (PE)

A non-resident enterprise that carries on business in the Dominican Republic through a permanent establishment is subject to CIT at 27% on profits attributable to the PE. The definition of PE follows the OECD Model, including:

• A fixed place of business (office, branch, factory, workshop)
• A construction or installation project lasting more than 6 months
• A dependent agent with authority to conclude contracts

A PE must register with the DGII, obtain an RNC, and file annual CIT returns. Branch profits remitted abroad are subject to 10% WHT (or reduced treaty rate).

CFC Rules

The Dominican Republic has introduced controlled foreign corporation (CFC) rules that attribute passive income of foreign entities controlled by Dominican residents to the resident shareholder. A foreign entity is considered a CFC if Dominican residents hold more than 50% of the capital or voting rights and the entity is subject to an effective tax rate of less than 60% of the Dominican CIT rate (i.e., less than approximately 16.2%).

Disclaimer

This guide provides general information about Dominican Republic cross-border taxation for the 2026 tax year. Tax laws and treaties may change. Always consult with a qualified Dominican tax advisor for advice specific to your cross-border situation. InvestmentKit does not provide tax advice.