Dominican Republic Investment Income Tax Guide 2026

Dividend Taxation

Dividends distributed by Dominican companies to shareholders are subject to withholding tax (WHT) of 10%. However, if the shareholder has held the shares for more than one year, the dividend is exempt from WHT. This exemption encourages long-term investment in Dominican companies.

• Standard WHT: 10% on gross dividends
• Held >1 year: 0% WHT — fully exempt
• Foreign dividends received: Taxable at progressive ISR rates (15-25%), with foreign tax credit for tax paid abroad

The dividend exemption for long-term holdings applies to both resident and non-resident shareholders, making Dominican corporations attractive holding vehicles.

Interest Taxation

Interest income earned from Dominican sources is subject to a final withholding tax of 10%. This includes:

• Bank deposits: Interest on savings accounts, CDs, and time deposits
• Corporate bonds: Interest on bonds issued by Dominican companies
• Government securities: Interest on sovereign bonds and treasury bills
• Private loans: Interest on loans between private parties

The 10% WHT is a final tax for resident individuals — no further tax is due on the interest income at year-end. For corporate recipients, the interest is included in taxable income and subject to CIT at 27%, with the WHT credited against the final liability.

Royalty Taxation

Royalties paid to residents or non-residents for the use of intellectual property, patents, trademarks, copyrights, and know-how are subject to a withholding tax of 27%. This rate may be reduced under applicable double taxation treaties (see Cross-Border Guide).

Capital Gains on Investments

As noted in the Capital Gains Guide, gains from the sale of shares, stocks, bonds, and other securities are not subject to tax in the Dominican Republic. This creates a favourable environment for active trading and portfolio rebalancing without tax consequences.

Foreign Investment Income

Dominican tax residents are taxed on their worldwide income. Foreign investment income (dividends, interest, capital gains from foreign sources) is subject to standard ISR rates. A foreign tax credit is available for income taxes paid abroad, limited to the Dominican tax attributable to that income. The credit is claimed on the annual ISR return with supporting documentation.

Disclaimer

This guide provides general information about Dominican Republic investment income tax for the 2026 tax year. Tax laws may change. Always consult with a qualified Dominican tax advisor or the DGII directly for advice specific to your situation. InvestmentKit does not provide tax advice.