Self-Employed Tax in Dominican Republic

What income tax rates apply to self-employed individuals in the Dominican Republic?

Self-employed individuals (personas fisicas) in the Dominican Republic pay ISR (Impuesto Sobre la Renta) on Dominican-source income at the same progressive rates as employees. The thresholds are adjusted annually for inflation by the DGII (Direccion General de Impuestos Internos). For 2025-2026, the four brackets are:

Dominican Republic applies a territorial tax system: foreign-source income is generally not subject to ISR. Self-employed individuals earning Dominican-source professional or business income file the IR-1 (Declaracion Jurada Anual del Impuesto Sobre la Renta de Personas Fisicas) by March 31 of the following year. Income is taxable net of allowable business expenses. When a client company pays a self-employed professional for services, the payer must withhold 10% of the gross payment at source (retencion en la fuente); that withheld amount is credited against the individual's annual ISR liability settled on the IR-1.

A qualified tax professional can assist with calculating allowable deductions and reconciling source withholdings against the annual liability.

How do anticipos (advance income tax payments) work?

Self-employed individuals who operate as a registered contribuyente and exceed routine thresholds are subject to anticipos: monthly advance payments of ISR due by the 15th of each month throughout the tax year. The standard method calculates the previous year's final ISR liability, divides it into 12 equal installments, and the monthly payment equals one-twelfth of that figure. Where the effective tax rate on gross income falls below 1.5%, the advance is calculated as 1.5% of gross declared income divided by 12, whichever produces the higher installment. These prepayments are credited against the final IR-1 balance due on March 31; any excess is carried forward or refunded. One key advantage of enrolling in the PST simplified regime (see below) is the waiver of anticipos entirely for qualifying small earners.

What is the PST simplified tax regime and who qualifies?

The Procedimiento Simplificado de Tributacion (PST) is a DGII-administered regime that replaces the standard ISR and ITBIS compliance process for small taxpayers who lack organized accounting. Two categories of self-employed earners can qualify:

• Income-based track (ingresos): Sole proprietors and independent professionals with annual gross income not exceeding approximately DOP 8,771,771 (inflation-adjusted annually). Tax is assessed as a flat percentage applied to sales or gross income rather than through full profit-and-loss accounting.
• Purchases-based track (compras): Commercial operators with annual purchases not exceeding approximately DOP 40,759,725 can base their simplified payment on purchase volumes.

Under the PST, participants benefit from: no requirement for organized bookkeeping, no anticipos, no asset tax, no obligation to submit full purchase/sales voucher data, and an automatic installment plan (two installments for the income track, three for the purchases track). ISR is also waived for the first six months of the year for new PST enrollees. To enroll, the taxpayer must complete Form PST-01 at the DGII, have a current RNC, and be in good standing with existing obligations.

For a broader overview of the Dominican Republic tax environment, see the Dominican Republic country overview.

Are TSS social-security contributions mandatory for self-employed individuals?

The Dominican social-security system (Sistema Dominicano de Seguridad Social, SDSS) administered by the TSS (Tesoreria de la Seguridad Social) covers pension (AFP - Administradora de Fondos de Pensiones), family health insurance (SFS - Seguro Familiar de Salud), and occupational risk insurance (SRL). For employees, mandatory combined contributions total roughly 12.91% from employees and 15.19% from employers.

For self-employed individuals without employees, TSS contributions are voluntary, not mandatory under current Dominican law. An independent worker who wishes to participate in the AFP pension scheme or SFS health system may enroll voluntarily at the TSS. The applicable employee-equivalent rates are 2.87% for the AFP pension and 3.04% for the SFS health fund, applied against a declared contribution base. A self-employed person who does hire staff must register as an employer with the TSS and remit mandatory payroll contributions on employees' behalf.

What ITBIS (VAT) and e-CF invoicing obligations apply?

ITBIS (Impuesto sobre Transferencias de Bienes Industrializados y Servicios) is the Dominican Republic's value-added tax, charged at a standard rate of 18% on most goods and services. A reduced rate of 16% applies to certain essential categories. There is no minimum revenue threshold for ITBIS registration: any person conducting a taxable commercial activity must register with the DGII and file monthly IT-1 returns by the 20th of the following month. ITBIS collected on outputs is offset against ITBIS paid on inputs (the standard credit-debit mechanism), with the net amount remitted.

Alongside ITBIS obligations, Dominican taxpayers at all scales are being phased into the e-CF (Comprobante Fiscal Electronico) system under Law 32-23. Large and medium taxpayers reached their deadline by November 2025. Micro, small, and unclassified businesses must implement e-CF by November 15, 2026 (extended from May 2026 by the DGII). Each e-CF receives a unique electronic tax receipt number (e-NCF) signed digitally and validated in real time with the DGII. Self-employed individuals obtaining an RNC must ensure they are authorized to issue e-CFs before their applicable deadline, or face penalties under the Tax Code.

All self-employed earners with material income are strongly encouraged to work with a qualified tax professional to navigate ITBIS filing, PST eligibility, and e-CF implementation concurrently.