What is the income tax rate in the Dominican Republic and how is it applied?
The corporate income tax rate is currently 25% on the taxable income of each fiscal year. This tax must be withheld at a corporate level from the dividends paid by the company. As to individuals, the tax rate increases in proportion to the income, the highest rate coinciding with the corporate rate of 25%. The employer must withhold this tax from the salary paid to the employee. Payments made abroad are also subject to a 25% income tax, to be withheld by the Dominican party. Interests owed to foreign financial institutions are taxed with a lower rate of 5%. A 10% tax rate applies to income obtained in the course of business activities, such as fees, commissions, etc., which has to be withheld by the person or company making the payment.
