Managing Corporate Taxation in Latin American Countries - Dominican Republic

Extract

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Managing Corporate Taxation in Latin American Countries - Dominican Republic

Footnotes

1 Dividends and profits distributed by local branches are not subject to tax in Dominican Republic when branches have paid their corporate income tax on their Dominican Source income.

2 10% will apply when interests are paid to financial institutions. When interests are paid to non-financial institutions, the applicable withholding tax rate is of 25%.

3 In order to establish transfer pricing between related entities, the Dominican source income of branches or other forms of permanent establishments of foreign companies operating in the country will be determined based on actual results obtained from their operations in the Dominican Republic.

4 Goods subject to excise taxes are: leaded and unleaded fuel (16% ad-valorem tax); cigarettes (specific amounts of RD$29.59- RD$14.79 per cigarettes and a 20% ad-valorem tax), alcoholic beverages (specific amounts of RD$389.43- RD$317.59 per liter and a 7.5% ad-valorem), telecommunications (10%); insurances (16%) except if they fall under Law 187-01; electronic items (10-20%); among others

5 A tax of RD$1.50 per every thousand pesos (RD$1,000.00) is levied on the values of all checks or wire transfers.

6 This rate applies on the total value of the assets, including real estate properties as reflected in the tax payers' balance sheet, not adjusted by inflation and after applying the deduction for depreciation, amortization and reserves for non-collectable accounts. It will be excluded from the taxable base of this tax stock investments made in other companies, land located in rural areas, fixtures on agricultural exploitation and advance taxes.

7 Reference is made to the most usual rates, but other rates may be applicable.

1. Income Tax

1.1 General Aspects

1.1.1 Income Tax Rate.

The general statutory corporate income tax rate for entities incorporated in the Dominican Republic, branches or permanent establishments of foreign companies is 25%.

1.1.2 Taxable Base.

All Dominican source income is subject to income tax unless the result is the Gross Income from which all expenses incurred in obtai...

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