What is the corporate income tax rate in the Dominican Republic?

The ISR (Impuesto sobre la Renta) rate for companies is 27% on net taxable Dominican-source income. This flat rate applies to resident corporations, SRL entities, branches, and permanent establishments. The annual return (Form IR-2) is due within 120 days of the fiscal year-end. Deductions include ordinary expenses, depreciation, and interest subject to thin-capitalization limits.

Who qualifies for the RST simplified tax regime and what rate applies?

Businesses with annual gross income under DOP 8.7 million (income modality) or annual purchases under DOP 40 million (purchase modality) may enroll in the RST under Decree 265-19. Qualifying taxpayers pay a single 7% rate on gross income covering both ISR and ITBIS, file one annual return by February 28, and are exempt from monthly advance payments and the 1% assets tax.

What is ITBIS and when must it be filed?

ITBIS (Impuesto sobre Transferencias de Bienes Industrializados y Servicios) is a value-added tax at 18% on most goods and services, with a 16% reduced rate on certain basic food products and 0% for exports. Registered businesses file Form IT-1 monthly, remitting the difference between output tax collected and input tax credits, due within the first 20 days of the following month.

How does the 1% assets tax work as an alternative minimum tax?

Companies outside RST pay 1% annually on their total taxable assets (cash, inventory, receivables, fixed assets net of depreciation, intangibles). If the computed 27% ISR liability is less than 1% of assets, the shortfall is due as an additional payment. When ISR equals or exceeds the assets tax, no extra payment is owed. RST participants are exempt from this tax on assets tied to their business activity.

What are the key withholding and advance-payment obligations?

Non-RST companies make monthly advance income-tax payments (anticipos) of 1/12 of the prior-year ISR, due by the 15th. Withholding rates include 10% on dividends, 10% on independent service fees and commercial rents paid to individuals, and 27% on royalties paid to non-residents. Monthly withholding remittances are due by the 10th of the following month on Form IR-17.

Small Business Tax in Dominican Republic — Rates, Rules & Filing

Dominican Republic tax law imposes several distinct obligations on small businesses: a flat corporate income tax, a value-added tax on most goods and services, an alternative minimum tax on assets, monthly advance payments toward the annual income tax, and a growing electronic-invoicing requirement. The Direccion General de Impuestos Internos (DGII) administers all of these under Tax Code No. 11-92 and its subsequent amendments. This overview focuses on the core obligations most relevant to small and micro businesses. Nothing here constitutes tax guidance; a licensed Dominican tax professional should be consulted before making compliance decisions.

What is the corporate income tax rate for Dominican businesses?

Resident companies, branches, and permanent establishments pay ISR (Impuesto sobre la Renta) at a flat rate of 27% on net taxable Dominican-source income. The tax year may end on December 31, March 31, June 30, or September 30, and the annual return (Form IR-2) must be filed within 120 days after the fiscal year-end. Extensions of up to 60 days are available on request from DGII. Allowable deductions include ordinary and necessary business expenses, depreciation, interest (subject to thin-capitalization limits), and charitable contributions capped at 5% of net taxable income (PwC Worldwide Tax Summaries, accessed June 2026).

What is the Simplified Tax Regime (RST) and who qualifies?

Presidential Decree No. 265-19 created the Regimen Simplificado de Tributacion (RST) to reduce compliance burden for small taxpayers. Qualifying taxpayers replace the standard ISR and ITBIS obligations with a single 7% rate applied to annual gross income, covering both taxes in one payment filed annually. Two eligibility modalities exist:

Income-based modality: annual gross income must not exceed DOP 8,700,000 (adjusted periodically for inflation). Covers service providers, goods producers, independent professionals, and the agricultural sector.
Purchase-based modality: applies to retailers and importers whose annual purchases and imports do not exceed DOP 40,000,000.

For purchase-based participants, the effective tax is calculated by applying the 7% rate to an imputed income derived from purchases using sector-specific commercial margin tables published by DGII. RST participants are also exempt from the 1% assets tax on assets related to their economic activity and are not required to make monthly advance payments (anticipos). Annual returns under RST use simplified forms (RS1 through RS4 depending on entity type) and are due by February 28 of the following year (AMCHAM Dominican Republic; DGII RST guide, Decreto 265-19).

Excluded from RST: entities engaged in real estate sales, tobacco, fuel, alcohol production, financial services, insurance, telecommunications, and any entity that benefits from a special tax incentive law. Legal entities must be 100% owned by Dominican resident individuals and must not hold significant real estate unrelated to their core business.

How does ITBIS (VAT) work for small businesses?

ITBIS (Impuesto sobre Transferencias de Bienes Industrializados y Servicios) is the Dominican equivalent of a value-added tax. The standard rate is 18% on most goods and services. A reduced rate of 16% applies to specific food products including yogurt, butter, roasted coffee, edible fats, sugars, cocoa, and chocolate. Exports are zero-rated. Exempt categories include basic foods (fresh meats, eggs, bread, vegetables), medicines, educational and healthcare services, residential rent, and passenger transport (P&H Law; PwC Worldwide Tax Summaries).

Registered businesses charge ITBIS on taxable outputs and credit ITBIS paid on business inputs. The net monthly obligation (output tax minus input credits) is reported on Form IT-1, due within the first 20 days of the following month. Businesses enrolled in RST replace this monthly ITBIS cycle with the annual 7% RST filing described above.

How does the 1% assets tax function as a minimum tax?

All Dominican companies that are not enrolled in RST (or otherwise exempt) are subject to a 1% annual tax on total taxable assets under Article 268 of Tax Code No. 11-92. This levy acts as an alternative minimum tax: if the company's computed 27% ISR liability is lower than 1% of its assets, the company owes the difference as an additional payment. If the ISR equals or exceeds the assets tax, no separate assets-tax payment is owed.

Taxable assets include cash, inventory, accounts receivable, fixed assets (net of depreciation), intangibles, and prepaid expenses. Excluded are equity investments in other domestic companies and agricultural or rural land. The assets-tax declaration is filed alongside the annual IR-2, and payment is made in two equal installments: the first on the IR-2 filing deadline, the second six months later (Carlos Felipe Law Firm; PwC Worldwide Tax Summaries).

What are the advance-payment and withholding obligations?

Companies outside RST must make monthly advance income-tax payments (anticipos), due by the 15th of each month, beginning 45 days after the annual return is filed. The monthly installment equals either (a) one-twelfth of the prior-year ISR liability, or (b) 1.5% of the prior year's gross income -- whichever is greater for companies with an effective tax rate at or below 1.5% (drlawyer.com; phlaw.com).

Withholding obligations arise in several common situations: companies must withhold 10% on payments to independent service providers and 10% on commercial rent paid to individuals. Dividends distributed from after-tax profits are subject to a 10% final withholding. Royalties and technical fees paid to non-resident recipients are withheld at 27%. Monthly withholding remittances are due by the 10th of the following month on Form IR-17.

Tax type and rate reference

Tax	Rate	Base	Notes
ISR -- Corporate income tax	27%	Net taxable Dominican-source income	Flat rate; annual return Form IR-2
RST -- Simplified regime	7%	Annual gross income (or imputed income from purchases)	Optional; replaces ISR + ITBIS for eligible small taxpayers
ITBIS -- VAT	18% (16% reduced)	Value of taxable goods and services	Monthly Form IT-1; exports 0%
Impuesto sobre activos -- Assets tax	1%	Total taxable assets per balance sheet	Alternative minimum tax; waived if ISR >= asset tax
Dividend withholding	10%	After-tax distributed profits	Final tax for shareholders
Monthly advance payments (anticipos)	1/12 of prior ISR or 1.5% of gross income	Prior-year liability or gross income	Not applicable to RST participants

All Dominican businesses operating outside RST must also register with DGII to obtain an RNC (Registro Nacional de Contribuyentes), issue Comprobantes Fiscales Numerados (NCF) invoices, and -- as of May 15, 2026 -- comply with the mandatory electronic invoicing (eCF) requirement that now covers micro, small, and unclassified entities (Chambers Global Practice Guide 2026). Monthly purchase and sales declarations (Forms 606 and 607) are due by the 15th of the following month.

Learn more about jurisdiction-level context for the Dominican Republic on the Dominican Republic country overview. For a broader picture of indirect taxes including ITBIS exemptions, see the related Dominican Republic VAT and sales tax overview.

Tax obligations vary by business structure, industry, and annual revenue. A qualified Dominican tax professional registered with the DGII can confirm which regime applies and ensure filings meet current deadlines.

Small Business Tax in Dominican Republic

Key points