Dominican Republic Income Tax

Dominican Republic Income Tax (ISR) -- Self-Employed and Individuals Skill v0.1

Tier 2 (research-verified). Figures below are sourced from PwC Worldwide Tax Summaries, the DGII, the TSS, and Dominican law-firm guidance. Where a figure could not be confirmed against a primary source it is marked [RESEARCH GAP -- reviewer to confirm]. A Dominican CPA (Contador Público Autorizado) must sign off before filing.

Section 1 -- Quick Reference

Section 1 -- Quick Reference

Field	Value
Country	Dominican Republic (República Dominicana)
Tax	Impuesto Sobre la Renta (ISR) -- personal income tax
Currency	DOP (Dominican peso, RD$) only
Tax year	Calendar year (1 January -- 31 December)
Primary legislation	Código Tributario (Ley No. 11-92) and its regulations [Código Tributario]
Social security	Ley No. 87-01 (Sistema Dominicano de Seguridad Social / SDSS); Ley No. 116-80 (INFOTEP)
Tax authority (ISR)	Dirección General de Impuestos Internos (DGII) -- dgii.gov.do
Social-security authority	Tesorería de la Seguridad Social (TSS) -- tss.gob.do
Filing portal	DGII Oficina Virtual (OFV); TSS / SUIRPLUS for SDSS
Individual filing deadline	31 March of the following year (IR-1). FY2025 due 31 March 2026 [DGII]
Tax system	Territorial -- residents taxed on DR-source income [PwC]
Validated by	Pending -- requires sign-off by a Dominican Contador Público Autorizado (CPA)
Validation date	Pending
Skill version	0.1

ISR Rate Brackets (FY2025) -- Individuals (personas físicas)

ISR Rate Brackets (FY2025) -- Individuals (personas físicas) (PwC Worldwide Tax Summaries (updated 05 Dec 2025); DGII escala salarial FY2025)

Annual Taxable Income (RD$)	Tax on Lower Limit	Rate on Excess	Cumulative Tax at Top of Band
0 -- 416,220.00	0	0% (exempt)	RD$0
416,220.01 -- 624,329.00	0	15% of excess over 416,220.01	RD$31,216
624,329.01 -- 867,123.00	RD$31,216	20% of excess over 624,329.01	RD$79,775
867,123.01 and above	RD$79,776	25% of excess over 867,123.01	-- (top marginal rate 25%)

Arithmetic check of band bases:

• Top of 15% band: (624,329.00 − 416,220.01) × 15% = 208,108.99 × 0.15 = RD$31,216.35 ≈ RD$31,216 ✓

• Top of 20% band: 31,216 + (867,123.00 − 624,329.01) × 20% = 31,216 + 242,793.99 × 0.20 = 31,216 + 48,558.80 = RD$79,774.80 ≈ RD$79,775 (DGII publishes the next-band base as RD$79,776 owing to rounding) ✓

• Annual exempt threshold FY2025 — RD$416,220 DOP (inflation-indexed each year (up ~4.2% from FY2024's RD$399,923)) ([PwC; DGII Comunidad de Ayuda CA687])

• Monthly salary level at which withholding begins — ~RD$34,685/month DOP (416,220 ÷ 12) ([P&H Law; DGII])

• Top marginal ISR rate — 25% ([PwC; DGII])

[RESEARCH GAP -- reviewer to confirm] The FY2026 scale had not been separately confirmed as published by DGII at research time. Use the FY2025 scale for income earned in calendar 2025 and re-pull the DGII escala salarial for any later filing year.

Social-Security (SDSS) Contribution Rates -- Monthly Salary

Social-Security (SDSS) Contribution Rates -- Monthly Salary (PwC Worldwide Tax Summaries; TSS / SDSS (Ley 87-01); INFOTEP (Ley 116-80))

Component	Employee	Employer	Total	Statutory base / ceiling
AFP -- Seguro de Vejez, Discapacidad y Sobrevivencia (pension)	2.87%	7.10%	9.97%	Floor 1× / ceiling 20× minimum cotizable wage [TSS]
SFS -- Seguro Familiar de Salud (health)	3.04%	7.09%	10.13%	Floor 1× / ceiling 10× minimum cotizable wage [TSS]
SRL -- Seguro de Riesgos Laborales (occupational risk)	0.00%	~1.20%	~1.20%	Ceiling 4× minimum cotizable wage; employer-only [TSS]
SDSS subtotal	5.91%	15.39%	21.30%	--
INFOTEP (vocational training levy)	0.5% on year-end bonus only	1.00% of payroll	--	Separate from SDSS; collected via TSS [INFOTEP, Ley 116-80]

Arithmetic check of the SDSS subtotal:

• Employee: 2.87 + 3.04 + 0.00 = 5.91% ✓
• Employer: 7.10 + 7.09 + 1.20 = 15.39% ✓
• Total: 9.97 + 10.13 + 1.20 = 21.30% (= 5.91 + 15.39) ✓
• Employer cost incl. INFOTEP: 15.39 + 1.00 = ~16.39% of payroll [PwC; RemotePeople; Contadom]

Notes / caveats:

• SRL rate ~1.20% is approximate. It is a fixed component (~1.0% for all employers) plus a variable surcharge based on the company's risk classification (Type I–IV); sources differ on the maximum variable (cited as up to 0.3%, occasionally up to 0.6%). Confirm the specific company's assigned SRL rate from its TSS classification rather than assuming a flat 1.20% [TSS; Contadom].
• AFP 7.10% employer / 2.87% employee per PwC; some payroll guides itemize small allocations to solidarity/disability/operating funds differently (e.g. splitting out a 0.4% solidarity fund). Reconcile against current TSS technical instructions if exact sub-allocations are needed [PwC; caveat].
• INFOTEP's 0.5% employee charge is withheld from the Christmas bonus (regalía pascual), not from regular salary [INFOTEP].

SDSS Contribution Ceilings (multiplier of the minimum cotizable wage)

SDSS Contribution Ceilings (multiplier of the minimum cotizable wage)

Period	Minimum cotizable wage	AFP ceiling (20×)	SFS ceiling (10×)	SRL ceiling (4×)
From 1 Feb 2026	RD$23,223/mo [TSS]	RD$464,460/mo	RD$232,230/mo	RD$92,892/mo
1 Apr 2025 -- 31 Jan 2026	RD$21,674.80/mo [TSS Res. 01-2025]	RD$433,496/mo	RD$216,748/mo	RD$86,699.20/mo

Arithmetic check (1 Feb 2026 base RD$23,223): 23,223 × 20 = 464,460 ✓; × 10 = 232,230 ✓; × 4 = 92,892 ✓. (1 Apr 2025 base RD$21,674.80): × 20 = 433,496 ✓; × 10 = 216,748 ✓; × 4 = 86,699.20 ✓. Each ceiling ≥ the 1× floor. Use the ceiling matching the contribution month [TSS; conservative default].

[RESEARCH GAP -- reviewer to confirm] Direct fetches of tss.gob.do and the official Resolution 01-2025 PDF returned 403/timeout at research time. Ceiling figures were corroborated via Acento and P&H Law citing the official TSS announcement plus PwC. A reviewer should confirm the exact DOP ceilings and effective dates against the primary TSS resolution.

Withholding on Payments to Individuals (retención de ISR)

Withholding on Payments to Individuals (retención de ISR) (P&H Law; Decreto 139-98)

Payment type	Withholding rate	Authority
Professional services / honorarios (legal, accounting, engineering, consultancy)	10% ISR	Decreto 139-98
Technical services (masonry, plumbing, carpentry, etc.)	2% ISR	Decreto 139-98
Rentals paid to individuals	10% ISR	Decreto 139-98

Conservative Defaults

Conservative Defaults

Ambiguity	Default
Unknown residence / source of income	Treat as DR tax resident taxed on DR-source income (territorial) [PwC]
Unknown whether freelancer is SDSS-affiliated	Do NOT auto-apply employee SDSS deductions to a pure self-employed person (voluntary only) [TSS]
Unknown contribution month for SDSS ceilings	Use the ceiling set matching the contribution month (Feb-2026 set for current periods) [TSS]
Unknown tax year for ISR scale	Apply the FY2025 scale (exempt RD$416,220) for income earned in calendar 2025 [DGII]
Unknown expense category	Not deductible
Unknown business-use % (vehicle, phone, home)	0% deduction
Unknown ITBIS registration	Assume registered if taxable supplies are made; charge 18% [DGII]
Unknown RNC status	Self-employed carrying on business/professional activity must register (free) [DGII]

Section 2 -- Required Inputs and Refusal Catalogue

Required Inputs

• Minimum viable inputs — bank statement for the full tax year in CSV, PDF, or pasted text, plus confirmation of (a) residence status, (b) whether the person is salaried, self-employed, or both, and (c) RNC registration status.
• Recommended inputs — all sales invoices (comprobantes fiscales / NCF), purchase invoices/receipts, evidence of ISR withheld by payers (certificaciones de retención), TSS contribution records (if affiliated), prior-year IR-1 or assessment, ITBIS registration status.
• Ideal inputs — complete income and expenditure account, asset register with depreciation schedule, monthly IR-3/IR-17/IT-1 filings, withholding certificates, and regalía pascual records.
• Refusal if minimum is missing — SOFT WARN. No bank statement at all = hard stop. Bank statement without invoices = proceed with reviewer warning: "This IR-1 was produced from bank statement alone. The reviewer must verify that all deductions claimed are supported by valid fiscal receipts (NCF) and that the income is wholly DR-source business/professional income."

Refusal Catalogue

• R-DO-1 -- Residence / source uncertain — "Dominican Republic uses a territorial system, and the taxation of foreign-source income depends on residence facts and the 3-year rule for newly-resident individuals. This skill cannot determine residence. Please confirm before proceeding, or escalate to a Dominican CPA." ([PwC])
• R-DO-2 -- Companies / partnerships — "This skill covers individuals and sole proprietors (personas físicas) only. Sociedades and other personas jurídicas file the IR-2 corporate return under different rules. Escalate to a Dominican CPA."
• R-DO-3 -- Foreign-source income / expatriates — "Foreign-source investment income of a newly-resident individual is generally only taxed from the 3rd year of residence, and treaty relief may apply. Out of scope. Escalate to a Dominican CPA." ([PwC])
• R-DO-4 -- Capital gains / asset disposals — "Capital gains computations require specialised analysis under the Código Tributario. Escalate to a Dominican CPA."
• R-DO-5 -- Arrears / enforcement — "Client has outstanding ISR or SDSS arrears or is subject to DGII/TSS enforcement. Surcharges of 10% (first month) + 4%/month plus 1.10%/month interest compound quickly. Do not advise. Escalate to a Dominican CPA immediately." ([DGII])
• R-DO-6 -- ITBIS (VAT) return requested — "This skill covers income tax (ISR / IR-1) only. For Dominican ITBIS, use the dominican-republic-itbis skill (Form IT-1)."

Section 3 -- Transaction Pattern Library

This is the deterministic pre-classifier. When a bank statement transaction matches a pattern below, apply the treatment directly. Do not second-guess. If none match, fall through to Tier 1 rules in Section 5.

How to read this table. Match by case-insensitive substring on the counterparty name or description as it appears in the bank statement. Dominican statements are usually in Spanish. If multiple patterns match, use the most specific. If none match, fall through to Tier 1 rules.

3.1 Income Patterns (Credits / Créditos on Bank Statement)

3.1 Income Patterns (Credits / Créditos on Bank Statement)

Pattern	IR-1 Line	Treatment	Notes
Client name + TRANSFERENCIA, DEPÓSITO, PAGO RECIBIDO, ABONO	Gross business income	Business income	If ITBIS-registered, extract net (excl. 18% ITBIS)
HONORARIOS, FACTURA, SERVICIOS PROFESIONALES, CONSULTORÍA	Gross business income	Professional fees	Typical for self-employed; check if 10% was withheld at source
STRIPE PAYOUT, PAYPAL, WISE, DLOCAL	Gross business income	Platform payout	Match to underlying invoices; net of platform fee
UPWORK, FIVERR, TOPTAL, DEEL	Gross business income	Freelance platform	Net of platform commission
NÓMINA, SALARIO, SUELDO, PAGO EMPLEADOR [name]	Employment income (separate)	Salary -- already withheld	NOT self-employment; ISR already withheld via IR-3
ALQUILER RECIBIDO, RENTA RECIBIDA	Rental income	Rental income	Not business income; 10% may have been withheld
INTERESES, INTERÉS GANADO	Investment income	Interest income	Check withholding
DIVIDENDOS	Investment income	Dividend income	Subject to separate dividend rules -- flag
DEVOLUCIÓN DGII, REEMBOLSO ISR	EXCLUDE	Not income	Tax refund from prior year

3.2 Expense Patterns (Debits / Débitos) -- Deductible Business Expenses

3.2 Expense Patterns (Debits / Débitos) -- Deductible Business Expenses

Pattern	Category	Treatment	Notes
ALQUILER OFICINA, RENTA LOCAL, OFFICE RENT	Office rent	Deductible	Must be backed by NCF; 10% ISR withholding obligation if paid to an individual
SEGURO RESPONSABILIDAD, SEGURO PROFESIONAL	Professional insurance	Deductible
CONTADOR, AUDITOR, CPA, HONORARIOS LEGALES, ABOGADO	Accountancy / legal fees	Deductible	Business-related; 10% ISR withholding if paid to an individual
PAPELERÍA, MATERIALES OFICINA, OFFICE DEPOT	Office supplies	Deductible
PUBLICIDAD, GOOGLE ADS, META ADS, FACEBOOK ADS	Marketing/advertising	Deductible
CAPACITACIÓN, CURSO, SEMINARIO, CONFERENCIA	Training	Deductible	Must relate to current business
COMISIÓN BANCARIA, CARGO BANCO, BANRESERVAS CARGO, POPULAR CARGO	Bank charges	Deductible	Business account only
COMISIÓN STRIPE, COMISIÓN PAYPAL	Payment processing fees	Deductible
DOMINIO, HOSTING, AWS, DIGITALOCEAN, CLOUDFLARE	IT infrastructure	Deductible	Capitalise if a long-lived asset (flag)

3.3 Expense Patterns (Debits) -- SaaS and Software

3.3 Expense Patterns (Debits) -- SaaS and Software

Pattern	Category	Treatment	Notes
GOOGLE WORKSPACE, MICROSOFT 365, OFFICE 365	Software subscription	Deductible	Recurring subscription = operating expense
ADOBE, CANVA, FIGMA, NOTION, SLACK, ZOOM	Software subscription	Deductible
ANTHROPIC, OPENAI, GITHUB, ATLASSIAN, DROPBOX	Software subscription	Deductible
LICENCIA PERPETUA SOFTWARE (high value)	Capital item	Capitalise / depreciate	Flag for reviewer; not an immediate expense

3.4 Expense Patterns (Debits) -- Utilities (may need apportionment)

3.4 Expense Patterns (Debits) -- Utilities (may need apportionment)

Pattern	Category	Tier	Notes
EDESUR, EDENORTE, EDEESTE, CEPM	Electricity	T2 if home office	100% if dedicated office; proportional if home
CLARO, ALTICE, VIVA, WIND TELECOM	Telecoms/broadband	T2	Business-use portion only; default 0% if mixed
CAASD, INAPA, AGUA	Water	T2 if home office	Proportional if home

3.5 Expense Patterns (Debits) -- Travel

3.5 Expense Patterns (Debits) -- Travel

Pattern	Category	Treatment	Notes
ARAJET, JETBLUE, AMERICAN, COPA, AVIANCA	Flights	Deductible if business travel	Must be wholly business purpose
HOTEL, BOOKING.COM, AIRBNB	Accommodation	Deductible if business travel
UBER, DIDI, CABIFY, TAXI	Local transport	Deductible if business purpose
COMBUSTIBLE, GASOLINA, GASOLINERA	Vehicle fuel	T2 -- business % only	Requires mileage log
PARQUEO, PEAJE	Parking / tolls	T2 -- business % only

3.6 Expense Patterns (Debits) -- NOT Deductible

3.6 Expense Patterns (Debits) -- NOT Deductible

Pattern	Category	Treatment	Notes
RESTAURANTE, CENA, ALMUERZO, ENTRETENIMIENTO	Entertainment	NOT deductible	Personal/entertainment -- flag any client-meal claim for reviewer
PERSONAL, SUPERMERCADO, JUMBO, NACIONAL, BRAVO, LA SIRENA	Personal expenses	NOT deductible	Private living costs
MULTA, RECARGO, PENALIDAD	Fines/penalties	NOT deductible	Public policy
PAGO ISR, IMPUESTO RENTA, DGII PAGO	Tax payments	NOT deductible	Income tax cannot reduce income
RETIRO PERSONAL, RETIRO EFECTIVO (personal)	Drawings	NOT deductible	Not an expense

3.7 Expense Patterns (Debits) -- Capital Items (depreciate)

3.7 Expense Patterns (Debits) -- Capital Items (depreciate)

Pattern	Category	Treatment	Notes
LAPTOP, COMPUTADORA, MACBOOK, DESKTOP	Computer hardware	Depreciate	Asset register; not an immediate expense
IMPRESORA, ESCÁNER, COPIADORA	Office equipment	Depreciate
MOBILIARIO, ESCRITORIO, SILLA, ARCHIVO	Furniture/fittings	Depreciate
VEHÍCULO, CARRO (business)	Motor vehicle	Depreciate	Business % only
AIRE ACONDICIONADO, INVERSOR	Equipment	Depreciate

[RESEARCH GAP -- reviewer to confirm] Specific Dominican depreciation categories and rates under the Código Tributario (Art. 287 categories I/II/III) were not in the research data set. Treat capital items as depreciable and flag the rate for the reviewer; do not invent a percentage.

3.8 Exclusions (Neither Income nor Expense)

3.8 Exclusions (Neither Income nor Expense)

Pattern	Treatment	Notes
TRANSFERENCIA PROPIA, ENTRE CUENTAS, CUENTA PROPIA	EXCLUDE	Own-account transfer
PAGO PRÉSTAMO, CAPITAL PRÉSTAMO	EXCLUDE	Loan principal movement
TSS, AFP, ARS, SEGURIDAD SOCIAL	SDSS contribution	Only if voluntarily affiliated; treat per Section 5
PAGO ITBIS, IT-1	EXCLUDE	ITBIS liability payment, not an expense
RETENCIÓN ISR (suffered)	Credit against ISR	Not an expense -- offsets the annual liability

3.9 Dominican Banks -- Statement Format Reference

3.9 Dominican Banks -- Statement Format Reference

Bank	Common Patterns	Notes
Banreservas	TRANSFERENCIA, DÉBITO, CRÉDITO, CARGO	PDF/CSV; description holds counterparty + reference
Banco Popular Dominicano	TRF, PAGO, DÉBITO AUTOMÁTICO, COMISIÓN	PDF/CSV
BHD	TRANSFERENCIA, ACH, CARGO, ABONO	PDF/CSV
Scotiabank RD	PAYMENT, TRF, FEE, CARGO	PDF/CSV
Banco BHD / Asociación Popular (APAP)	DÉBITO, CRÉDITO, CARGO	PDF; shorter descriptions

Section 4 -- Worked Examples

Example 1 -- Client Payment (ITBIS-registered, 10% withheld at source)

Input line: 15/03/2025 ; BANRESERVAS TRANSFERENCIA RECIBIDA ; CONSTRUCTORA DEL CARIBE SRL ; PAGO FACT B0100000045 ; +106,200.00 ; DOP

Reasoning: Client payment for professional services. Provider is ITBIS-registered, so the gross billed was net + 18% ITBIS. If the RD$106,200 received already reflects the invoice net of any ISR withholding, confirm the certificación de retención. Assume the bank credit is the cash received and the underlying invoice net of ITBIS is the business income line.

• If RD$106,200 is inclusive of 18% ITBIS: net business income = 106,200 ÷ 1.18 = RD$90,000; ITBIS collected = RD$16,200 (a liability to DGII, excluded from income).

Classification: Business income = RD$90,000 (net of ITBIS). ITBIS RD$16,200 excluded. Note any 10% ISR withheld by the payer as a credit against the annual ISR.

Example 2 -- SaaS Subscription (Fully Deductible)

Input line: 01/04/2025 ; POPULAR DÉBITO AUTOMÁTICO ; ADOBE SYSTEMS ; CREATIVE CLOUD ABR ; -1,770.00 ; DOP

Reasoning: Monthly SaaS subscription, recurring, business use. Fully deductible operating expense. ITBIS on imported digital services may apply separately; for income tax the business cost is the net charge.

Classification: Deductible business expense = RD$1,770 (or net of recoverable ITBIS if registered and reclaimable).

Example 3 -- Honorarios Paid to an Individual (Withholding obligation)

Input line: 22/04/2025 ; BHD TRANSFERENCIA ; JUAN PÉREZ (abogado) ; HONORARIOS ASESORÍA ; -50,000.00 ; DOP

Reasoning: Payment for professional services to an individual. Deductible expense, but the payer has an obligation to withhold 10% ISR (RD$5,000) and remit it on Form IR-17 by the 10th of the following month [Decreto 139-98]. If the RD$50,000 is the net paid after withholding, gross fee = RD$55,555.56 and RD$5,555.56 withheld; if RD$50,000 is the gross fee, RD$5,000 should have been withheld and RD$45,000 paid. Confirm the contract basis.

Classification: Deductible expense (gross fee). Flag the 10% IR-17 withholding obligation for the reviewer.

Example 4 -- Salary Received (Already Withheld -- not self-employment)

Input line: 30/04/2025 ; POPULAR ABONO ; NÓMINA EMPRESA XYZ SRL ; SUELDO ABRIL ; +60,000.00 ; DOP

Reasoning: Employment income. The employer withholds ISR monthly via the annualized scale and reports on Form IR-3. No tax is due until annualized salary exceeds RD$416,220 (~RD$34,685/month) [P&H Law; DGII]. A purely salaried person whose wages are fully withheld generally need not file IR-1. This is NOT self-employment income.

Classification: Employment income (separate stream). Exclude from self-employed business income; confirm withholding via the employee's payslip.

Example 5 -- ISR Computation for a Self-Employed Professional

Inputs: Self-employed consultant, DR-resident, RNC-registered. Gross professional income RD$1,200,000; deductible business expenses RD$300,000; not SDSS-affiliated.

Reasoning:

• Net taxable income = 1,200,000 − 300,000 = RD$900,000.
• RD$900,000 falls in the top band (over RD$867,123).
• ISR = base RD$79,776 + 25% × (900,000 − 867,123.01) = 79,776 + 25% × 32,876.99 = 79,776 + 8,219.25 = RD$87,995.25.
• If RD$30,000 of ISR was withheld at source (certificaciones de retención), ISR due on IR-1 = 87,995.25 − 30,000 = RD$57,995.25.

Classification: IR-1 net taxable income RD$900,000; ISR before credits RD$87,995.25; ISR due after withholding credit RD$57,995.25.

Example 6 -- Internal Transfer (Exclude)

Input line: 15/05/2025 ; BHD TRANSFERENCIA ; CUENTA PROPIA - AHORROS ; ; -100,000.00 ; DOP

Reasoning: Transfer between the client's own accounts. Neither income nor expense. Exclude entirely.

Classification: EXCLUDE.

Section 5 -- Tier 1 Rules (When Data Is Clear)

5.1 Territorial System and Residence

• Territorial system and residence — The Dominican Republic uses a territorial system: residents are taxed on DR-source income. Foreign-source investment/financial income of a newly-resident individual is taxed only from the 3rd year of residence. Default to DR-source income unless residence facts indicate otherwise [PwC]. (Código Tributario (Ley 11-92); PwC)

5.2 The Progressive ISR Scale (FY2025)

• Progressive ISR scale application — Apply the Section 1 scale: 0% up to RD$416,220; 15% on 416,220–624,329; base RD$31,216 + 20% on 624,329–867,123; base RD$79,776 + 25% above 867,123. Top marginal rate 25%. The exempt threshold is inflation-indexed annually [PwC; DGII]. (PwC; DGII)

5.3 Tax Year and Filing

• Tax year and filing — Tax year is the calendar year ending 31 December. Individuals / sole proprietors file Form IR-1 by 31 March of the following year. Salaried employees with only fully-withheld wages generally need not file [DGII]. (DGII)

5.4 Employee Withholding (PAYE-style)

• Employee withholding — Employers withhold ISR monthly using the annualized scale (no tax until salary exceeds ~RD$34,685/month) and report on Form IR-3 by the 10th of the following month, even if nil [P&H Law; DGII]. (P&H Law; DGII)

5.5 Deductibility of Business Expenses

• Deductibility of business expenses — Expenses incurred to obtain, maintain, or conserve taxable income are deductible if supported by a valid fiscal receipt (NCF). Personal, entertainment, fines, drawings, and the income tax itself are not deductible. Mixed-use expenses must be apportioned on a reasonable, documented basis.

5.6 Social Security (SDSS) -- Dependent Workers

• SDSS for dependent workers — For salaried workers, the employer withholds the employee SDSS share (5.91% = 2.87% AFP + 3.04% SFS) and pays the employer share (~15.39% = 7.10% AFP + 7.09% SFS + ~1.20% SRL) plus 1% INFOTEP, each subject to its component ceiling [PwC; TSS]. Use the ceiling set matching the contribution month (Section 1). (PwC; TSS)

5.7 Self-Employed and SDSS

• Self-employed and SDSS — Self-employed and independent professionals are NOT mandatorily enrolled in SDSS (the TSS mandatory contributory regime applies to dependent workers). They may affiliate voluntarily to access pension (AFP) and health (ARS/SFS) benefits. Do not auto-apply employee SDSS deductions to a pure freelancer unless they have opted in [TSS Preguntas Frecuentes]. (TSS Preguntas Frecuentes)

5.8 RNC Registration

• RNC registration — Any person carrying on business or independent professional/commercial activity must register with DGII to obtain an RNC (Registro Nacional del Contribuyente). Registration is free (~25 days). There is no de-minimis turnover threshold for RNC for business activity [DGII; BizLatin Hub]. (DGII; BizLatin Hub)

5.9 Withholding on Payments to Individuals

• Withholding on payments to individuals — When the client pays an individual, withholding obligations arise: 10% on professional services (honorarios) and rentals; 2% on technical services; remitted on Form IR-17 by the 10th of the following month [Decreto 139-98; P&H Law]. (Decreto 139-98; P&H Law)

5.10 ITBIS (VAT) Interaction

5.10 ITBIS (VAT) Interaction

Scenario	Income Tax Treatment
ITBIS collected on sales (registered)	NOT income -- exclude from business income
Input ITBIS recovered (registered)	NOT an expense -- exclude from deductions
Input ITBIS blocked/non-recoverable	IS an expense -- include gross
Unregistered for ITBIS	Gross amounts paid are the cost

• ITBIS standard rate and reverse-perception — ITBIS standard rate is 18% (16% reduced on certain foods). Registered persons file Form IT-1 by the 20th of the following month. A 18% reverse-perception applies on operations over RD$300,000 with unregistered/suspended-RNC providers (Norma General 06-23) [DGII; EY]. (DGII; EY)

5.11 Regalía Pascual (Christmas Bonus / 13th salary)

• Regalía Pascual — Mandatory: 1/12 of total ordinary salary earned in the calendar year, paid by 20 December. The legal twelfth is ISR-exempt; INFOTEP takes 0.5% from the bonus [Labor Code; INFOTEP]. (Labor Code; INFOTEP)

5.12 Filing Deadlines and Penalties

5.12 Filing Deadlines and Penalties

Item	Detail
IR-1 (individual annual ISR)	31 March of following year [DGII]
IR-3 (monthly employer ISR withheld)	10th of each month, even if nil [DGII]
IR-17 (other ISR withholdings / services / rentals)	10th of the following month [DGII]
IT-1 (monthly ITBIS)	20th of the following month [DGII]
TSS planilla (Autodeterminación SDSS)	First working days of the following month [TSS] [RESEARCH GAP -- reviewer to confirm exact window]
Late-payment surcharge (recargo)	10% for the first month + 4% per additional month or fraction [DGII]
Indemnizatory interest	1.10% per month (or fraction) on the unpaid balance [DGII]
Late filing	Surcharge/interest on tax due; additional fixed fines possible under the Código Tributario [DGII]
Late/non-payment of SDSS (TSS)	Recargos and interest per TSS rules; collection actions and employer liability [TSS]

Section 6 -- Tier 2 Catalogue (Reviewer Judgement Required)

6.1 Home Office Deduction

• Home office deduction — - Calculate the proportion of the home used for business (dedicated room(s) as a percentage of total area). - Apply that percentage to rent, electricity (EDESUR/EDENORTE/EDEESTE), water, internet. - Must be a genuinely dedicated workspace; a dual-use room does not qualify. Conservative default: 0% until the reviewer confirms the arrangement. Flag for reviewer: confirm floor-area basis and supporting NCF.

6.2 Motor Vehicle Business Use

• Motor vehicle business use — - Only the business-use percentage of fuel, insurance, maintenance, and depreciation is deductible. - Client must maintain a mileage log (business vs total). Conservative default: 0% business use until a mileage log is provided. Flag for reviewer.

6.3 Phone / Internet Mixed Use

• Phone / internet mixed use — - Business-use portion only (CLARO/ALTICE/VIVA). Client must provide a reasonable estimate. Conservative default: 0% until business percentage confirmed.

6.4 Bad Debt Write-Off

• Bad debt write-off — Deductible only if income was previously declared, recovery steps were taken, and the debt is genuinely irrecoverable. Flag all three for the reviewer.

6.5 Depreciation of Capital Assets

• Depreciation of capital assets — Capital items must be depreciated over their useful life under the Código Tributario rather than expensed. [RESEARCH GAP -- reviewer to confirm] the applicable category and rate (Art. 287 asset categories). Do not assume a rate.

6.6 Voluntary SDSS Affiliation for the Self-Employed

• Voluntary SDSS affiliation for the self-employed — If a freelancer has voluntarily affiliated, contributions are based on a declared income and may be partly deductible. Confirm the affiliation basis, the cotizable income, and the rates actually applied with the TSS.

6.7 Foreign-Source Income and the 3-Year Rule

• Foreign-source income and the 3-year rule — For a newly-resident individual, foreign-source investment/financial income is taxed only from the 3rd year of residence. Flag the residence start date and income source for the reviewer [PwC]. (PwC)

Section 7 -- Excel Working Paper Template

DOMINICAN REPUBLIC ISR -- IR-1 WORKING PAPER
Tax Year: 2025                    Currency: DOP (RD$)
Client: ___________________________  RNC: ______________
Residence: DR resident / Non-resident
Status: Self-employed / Salaried / Both
SDSS affiliation (self-employed): None / Voluntary

A. GROSS BUSINESS / PROFESSIONAL INCOME
  A1. Client payments (net of ITBIS if registered)   ___________
  A2. Platform payouts (Stripe, PayPal, Wise, etc.)  ___________
  A3. Other business income                           ___________
  A4. TOTAL gross income                              ___________

B. DEDUCTIBLE BUSINESS EXPENSES (NCF-supported)
  B1. Office rent                                     ___________
  B2. Professional insurance                          ___________
  B3. Accountancy / legal fees                        ___________
  B4. Office supplies                                 ___________
  B5. Software subscriptions                          ___________
  B6. Marketing / advertising                         ___________
  B7. Bank / payment processing fees                  ___________
  B8. Training                                        ___________
  B9. Travel (business)                               ___________
  B10. Telecoms (business %)                          ___________
  B11. Home office (% of utilities/rent)              ___________
  B12. Vehicle (business %)                           ___________
  B13. Depreciation (per Código Tributario)           ___________
  B14. Other allowable expenses                       ___________
  B15. TOTAL deductible expenses                      ___________

C. NET TAXABLE INCOME (A4 - B15)                      ___________

D. ISR COMPUTATION (FY2025 scale -- pass to engine)
  D1. ISR before credits                              ___________
  D2. Less: ISR withheld at source (10%/2%)           ___________
  D3. Less: provisional / other credits               ___________
  D4. ISR DUE / (refund)                              ___________

E. ITBIS (if registered -- separate IT-1)
  E1. ITBIS collected on sales (NOT income)           ___________
  E2. Input ITBIS recovered (NOT expense)             ___________

REVIEWER FLAGS:
  [ ] Residence / DR-source confirmed?
  [ ] RNC registration confirmed?
  [ ] All expenses NCF-supported?
  [ ] Home office % confirmed?
  [ ] Vehicle business % confirmed with mileage log?
  [ ] Phone/internet business % confirmed?
  [ ] Depreciation rate confirmed (RESEARCH GAP)?
  [ ] Withholding suffered reconciled to certificaciones?
  [ ] Withholding OBLIGATIONS on payments to individuals (IR-17) met?
  [ ] ITBIS excluded from income and expenses?
  [ ] SDSS only if voluntarily affiliated?

Section 8 -- Bank Statement Reading Guide

Dominican Bank Statement Formats

Dominican Bank Statement Formats

Bank	Format	Key Fields	Notes
Banreservas	PDF, CSV	Fecha, Descripción, Débito, Crédito, Balance	State-owned; most common
Banco Popular Dominicano	PDF, CSV	Fecha, Concepto, Monto, Balance	Card transactions show merchant
BHD	PDF, CSV	Fecha, Descripción, Cargo, Abono, Saldo	ACH transfers labelled clearly
Scotiabank RD	PDF, CSV	Date/Fecha, Description, Amount, Balance	Bilingual fields
APAP (Asociación Popular)	PDF	Fecha, Concepto, Retiro, Depósito	Shorter descriptions

Key Dominican Banking / Tax Terms

Key Dominican Banking / Tax Terms

Term	English	Classification Hint
TRANSFERENCIA / TRF	Transfer	Check direction for income/expense
DÉBITO AUTOMÁTICO	Direct debit	Regular expense (utility, subscription)
CARGO / COMISIÓN	Charge / fee	Bank charge (deductible)
ABONO / DEPÓSITO	Credit / deposit	Potential income
RETIRO	Withdrawal	Ask what cash was spent on
INTERESES	Interest	Interest income or bank charge
NÓMINA / SUELDO	Payroll / salary	Employment income (already withheld)
HONORARIOS	Professional fees	Business income (check 10% withholding)
NCF	Comprobante Fiscal	Fiscal receipt required to support deductions
RETENCIÓN	Withholding	ISR withheld at source -- credit against liability
ITBIS	VAT	Exclude from income/expense if registered
REGALÍA PASCUAL	Christmas bonus	13th salary; legal twelfth ISR-exempt

Section 9 -- Onboarding Fallback

If the client provides a bank statement but cannot answer onboarding questions immediately:

1. Classify all transactions using the pattern library (Section 3).
2. Mark all Tier 2 items as "PENDING -- reviewer must confirm".
3. Apply conservative defaults (Section 1).
4. Generate the working paper (Section 7) with clear flags.
5. Present the following questions to the client:

ONBOARDING QUESTIONS -- DOMINICAN REPUBLIC ISR
1. Residence: are you a Dominican tax resident? When did residence start?
2. Income type: self-employed, salaried, or both?
3. RNC: are you registered with DGII? What is your RNC?
4. ITBIS: are you registered for ITBIS (Form IT-1)?
5. Withholding suffered: do you have certificaciones de retención (10%/2% ISR withheld by payers)?
6. Withholding obligations: did you pay any individuals for professional (10%) or technical (2%) services or rent (10%)?
7. Home office: dedicated room or shared space? If dedicated, what % of floor area?
8. Vehicle: do you use a car for business? What % is business? Do you keep a mileage log?
9. Phone/internet: what % is business use?
10. SDSS: are you voluntarily affiliated to AFP/SFS as a self-employed person?
11. Any other income (employment, rental, dividends, interest, foreign-source)?
12. Any capital assets purchased during the year?

Section 10 -- Reference Material

Key Legislation / Authority References

Key Legislation / Authority References

Topic	Reference
Income tax (ISR)	Código Tributario (Ley No. 11-92) and regulations [DGII]
ISR scale FY2025	DGII escala salarial FY2025; PwC (updated 05 Dec 2025)
Social security (SDSS)	Ley No. 87-01; TSS resolutions
SDSS ceilings	TSS Resolution 01-2025 (1 Apr 2025); updated 1 Feb 2026 [TSS]
INFOTEP levy	Ley No. 116-80
Withholding on individuals	Decreto 139-98
ITBIS standard rate / reverse-perception	DGII; Norma General 06-23 [EY]
Minimum wage (non-sectorized)	CNS-01-2025 [WageIndicator]
Penalties / surcharges	Código Tributario; DGII

Thresholds and Reference Figures

Thresholds and Reference Figures

Item	Value	Source
ISR annual exempt threshold (FY2025)	RD$416,220	PwC; DGII
Monthly salary withholding trigger	~RD$34,685/month	P&H Law; DGII
Self-employed filing requirement (IR-1)	Income > RD$416,220 or carrying on business/professional activity	DGII
ITBIS standard rate	18% (16% reduced on certain foods)	DGII
ITBIS reverse-perception trigger (unregistered providers)	Operations > RD$300,000 (Norma General 06-23)	DGII; EY
Minimum cotizable wage (1 Feb 2026)	RD$23,223/month	TSS
Minimum cotizable wage (1 Apr 2025)	RD$21,674.80/month	TSS Res. 01-2025
AFP ceiling (20×, 1 Feb 2026)	RD$464,460/month	TSS
SFS ceiling (10×, 1 Feb 2026)	RD$232,230/month	TSS
SRL ceiling (4×, 1 Feb 2026)	RD$92,892/month	TSS
Minimum wage -- Large enterprise (1 Apr 2025)	RD$27,988.80/month	CNS-01-2025
Minimum wage -- Medium enterprise (1 Apr 2025)	RD$25,656.96/month	CNS-01-2025
Minimum wage -- Small enterprise (1 Apr 2025)	RD$17,193.12/month	CNS-01-2025
Minimum wage -- Micro enterprise (1 Apr 2025)	RD$15,860.32/month	CNS-01-2025
Free-zone (zona franca) minimum wage (1 Jun 2025)	RD$18,871/month (rising to RD$20,875 from 1 Jun 2026)	CNS-01-2025

Test Suite

Input: DR resident, gross professional income RD$1,200,000, deductible expenses RD$300,000, no SDSS, no withholding suffered. Expected: Net taxable income RD$900,000. ISR = 79,776 + 25% × (900,000 − 867,123.01) = 79,776 + 8,219.25 = RD$87,995.25. ISR due RD$87,995.25 (no credits).

Input: Net taxable income RD$700,000. Expected: ISR = 31,216 + 20% × (700,000 − 624,329.01) = 31,216 + 20% × 75,670.99 = 31,216 + 15,134.20 = RD$46,350.20.

Input: Net taxable income RD$500,000. Expected: ISR = 0 + 15% × (500,000 − 416,220.01) = 15% × 83,779.99 = RD$12,567.00 (RD$12,566.9985 rounded).

Input: Net taxable income RD$400,000. Expected: RD$400,000 ≤ RD$416,220 exempt threshold → ISR = RD$0.

Input: Net taxable income RD$900,000 (ISR before credits RD$87,995.25); RD$30,000 ISR withheld at source on honorarios. Expected: ISR due on IR-1 = 87,995.25 − 30,000 = RD$57,995.25.

Input: Monthly salary RD$50,000, below AFP/SFS ceilings (Feb-2026 set). Expected: Employee deduction = 5.91% × 50,000 = RD$2,955 (2.87% AFP = RD$1,435 + 3.04% SFS = RD$1,520). Employer cost ≈ 16.39% × 50,000 = RD$8,195 (subject to SRL 4× ceiling check) [PwC; TSS].

Input: Gross fee RD$55,555.56 paid to an individual lawyer. Expected: Withhold 10% = RD$5,555.56 on Form IR-17; pay net RD$50,000.00. Expense deductible at gross RD$55,555.56.

PROHIBITIONS

• NEVER apply the ISR scale to foreign-source income without confirming residence and the 3-year rule
• NEVER compute final ISR figures as definitive -- pass net taxable income to the deterministic engine and label outputs as estimated
• NEVER treat ITBIS collected on sales as business income
• NEVER treat recoverable input ITBIS as a deductible expense
• NEVER allow entertainment, personal expenses, fines, or the income tax itself as deductions
• NEVER auto-apply employee SDSS deductions to a pure self-employed person (voluntary only)
• NEVER mix SDSS ceiling sets across periods -- use the set matching the contribution month
• NEVER claim a deduction without a valid fiscal receipt (NCF)
• NEVER invent a depreciation rate -- it is a RESEARCH GAP for the reviewer
• NEVER forget the payer's own 10%/2% withholding obligations (IR-17) when paying individuals
• NEVER use an unverified FY2026 ISR scale for FY2025 income

Disclaimer

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