Capital gains tax in Dominican Republic

The Dominican Republic treats capital gains as ordinary taxable income, subject to the general income tax (Impuesto Sobre la Renta, ISR) rather than a separate statute. The legal basis is Law 11-92 (the Tax Code), Articles 289-305, as amended by Law 253-12. The Direccion General de Impuestos Internos (DGII) administers the tax and publishes the annual inflation-adjustment multipliers that determine the cost basis for every disposal.

What rate applies to capital gains in the Dominican Republic?

The rate depends on who is selling. Dominican corporations and all foreign persons (whether individuals or entities) pay the ISR corporate rate of 27% on the net capital gain, per Article 297 of the Tax Code as modified by Law 253-12. Dominican national individuals pay at the top personal rate of 25%. Shares listed on the Bolsa de Valores de la Republica Dominicana (BVRD) under public offerings qualified for a temporary reduced rate of 15% for three years from the effective date of Law 163-21 (2021).[^1] All computations must be expressed in Dominican pesos (DOP); USD-denominated contracts must be converted at the official exchange rate for tax purposes.

The table below summarizes effective CGT rates by taxpayer type.

How is the taxable gain calculated, and what is the inflation-adjusted basis?

The taxable capital gain is the difference between the sale price (or transfer value) and the adjusted acquisition cost. Article 289 of the Tax Code defines the adjusted acquisition cost as the original purchase price multiplied by the DGII's official inflation-adjustment factor (factor de actualizacion) for the period from acquisition to disposal. The DGII derives these multipliers from the Consumer Price Index published by the Banco Central de la Republica Dominicana and releases updated tables annually.[^2]

The practical effect is that a seller who acquired property in 2010 and sells in 2026 would inflate the 2010 cost by roughly sixteen years of cumulative DR consumer-price inflation before computing the gain. Documented capital improvements to real estate, acquisition-related notarial fees, and certain selling costs may also be added to the cost basis. Losses on capital disposals may generally offset gains recognized in the same tax year, subject to DGII review.

The gain computation is asset-specific. Accounts receivable, inventory held for regular sale, and assets subject to depreciation schedules (whose remaining book value already reflects prior capital-cost recovery) fall outside the capital-gains framework and are taxed as ordinary operating income or handled under recapture rules.

Which assets are within scope, and where must they be situated?

DR capital gains rules apply to assets situated or used in the Dominican Republic. The primary categories are real property located in the DR, shares or equity quotas (cuotas sociales) in Dominican legal entities, and intangible assets (patents, trademarks, concessions) registered or exploited in the DR.[^3] Financial instruments issued by DR entities are treated as DR-source assets regardless of where the seller is domiciled.

Foreign real estate or shares in non-DR entities held by a Dominican-resident taxpayer may be subject to DR income tax under the worldwide-income principle, with a foreign-tax credit available for taxes paid in the source country. The DR does not have a comprehensive tax-treaty network with major OECD jurisdictions as of 2026, so credit calculations rely on unilateral domestic rules.

How do the 1% annual property tax and the 3% transfer tax interact with capital gains on real estate?

Real estate disposals in the DR involve three overlapping levies, and distinguishing them is essential for sellers and their representatives.

First, the annual Impuesto al Patrimonio Inmobiliario (IPI) is charged on the holding, not the sale. Individuals pay 1% per year on the portion of their aggregate DR real estate value that exceeds the inflation-indexed threshold, which stands at DOP 10,695,494 (approximately USD 182,000) for 2026.[^4] Companies holding property as a corporate asset pay 1% on total asset value (functioning as a minimum ISR prepayment). IPI is not deductible against the capital gains computation on sale; it is a cost of ownership, not a cost of acquisition.

Second, the Impuesto sobre Transferencia Inmobiliaria (the property transfer tax) is set at 3% of the higher of the transaction price and the DGII's assessed cadastral value.[^5] This levy is borne by the buyer and must be paid before the title registry (Registro de Titulos) will record the transfer. It is separate from and additional to the seller's CGT obligation.

Third, the seller's CGT (27% or 25% on the net gain after inflation adjustment) must be declared and paid to the DGII. The DGII validates the seller's GC-2 (corporate) or GC-1 (individual) capital-gains affidavit before title can legally pass. In practice, both the buyer's transfer tax and the seller's CGT are settled at the notarial closing.

What withholding applies to share transfers?

Under DGII General Norm 07-2011, any legal entity (whether Dominican or foreign) that acquires shares, equity quotas, or similar capital rights from another party must withhold 1% of the total amount paid to the seller at the time of payment.[^6] This 1% is a prepayment on account of the seller's CGT obligation, not a final tax. The acquiring entity remits the withheld amount to the DGII by the tenth day of the month following payment. The seller subsequently files Form GC-1 (individuals) or GC-2 (entities) within 60 working days of the transaction and applies the 1% prepayment against the full CGT liability computed at 25% or 27% on the net gain.

If the seller ultimately shows no gain (because the adjusted cost basis equals or exceeds the sale price), the seller may apply for a refund of the withheld amount through the DGII's standard credit-refund procedure.

How are non-residents taxed on DR capital gains?

Article 305 of the Tax Code establishes that any payment of Dominican-source income to a non-resident individual, corporation, or entity is subject to withholding at the same rate specified in Article 297 for legal entities -- that is, 27%.[^7] This withholding constitutes a final and definitive tax for the non-resident; no additional DR income tax return is required. The acquiring party (whether a buyer or broker) acts as withholding agent and remits the tax to the DGII.

Non-residents selling DR real estate must also register with the DGII and obtain a Registro Nacional de Contribuyentes (RNC) identification number before the notary can process the transfer. The absence of a US-Dominican Republic bilateral tax treaty means non-resident US persons cannot reduce the 27% DR withholding via treaty; they may claim a foreign tax credit on their US return under IRC Section 901 for the DR tax actually paid.

A non-resident's primary-residence exemption is not available unless the seller has established full Dominican tax residency. Non-resident sellers may still deduct the inflation-adjusted cost basis when computing the gain subject to the 27% withholding.

Does ITBIS (VAT) apply to capital gains?

ITBIS -- the Dominican equivalent of VAT -- applies to the transfer of industrialized goods and the provision of services. The sale or transfer of a capital asset (real estate, shares, financial instruments, intangibles) is a capital event, not a supply of goods or services within the meaning of the ITBIS statute. Accordingly, ITBIS does not apply to the capital gain realized on a disposal, nor to the proceeds of a share sale or real estate transfer. The 3% property transfer tax described above is a separate instrument and is not an ITBIS charge.[^2]

Consult the Dominican Republic country overview for context on the broader DR tax environment, or review the DR's jurisdiction profile at TaxPros Rated's global jurisdictions directory.

The rules summarized here reflect Law 11-92, Law 253-12, Law 163-21, and DGII General Norm 07-2011 as verified in June 2026. Tax legislation and DGII regulatory guidance can change. A qualified tax professional with current DR practice experience should be engaged before any transaction involving DR-situated assets.