Dominican Republic Freelancer — IR-1, IT-1 & RST Regime

Establish the client's residence status, RNC registration, and whether they have any employment income alongside self-employment. The Dominican Republic uses a territorial system — only DR-source income is taxed, and foreign investment income is deferred until the third year of residency for new residents. Confirm the client holds an active RNC (Registro Nacional del Contribuyente) with DGII, which is mandatory for any independent professional or business activity.

Determine whether the client qualifies for and should elect the Régimen Simplificado de Tributación (RST). Under RST Ingresos (income-based), annual income must not exceed RD$10,742,792.74 — if eligible, 40% of gross income is automatically deducted as deemed expenses, taxing only 60% of income. If annual purchases exceed RD$49,392,150.51, the RST Compras track may apply. RST also eliminates the obligation to file monthly 606/607/608 transaction reports and removes the asset tax on business assets.

Gather all income and expense records for the calendar year. Income comprises professional fees (honorarios), platform payouts (Stripe, PayPal, Wise, Upwork, etc.), and any other self-employment receipts — net of ITBIS (18%) if the client is ITBIS-registered. Deductible expenses must be supported by valid fiscal receipts (NCF). Under the ordinary regime, entertainment, personal costs, fines, ISR payments, and drawings are excluded. Capital items (laptops, office equipment) must be depreciated, not expensed immediately.

Identify all ISR withheld at source during the year. Clients who receive professional fees (honorarios) from Dominican businesses are subject to a 10% ISR withholding (retención) under Decreto 139-98, which the payer remits on Form IR-17. These withholdings are a credit against the annual IR-1 liability. Rental income withheld at 10% and technical-service withholding at 2% must also be gathered. Missing certificaciones de retención must be chased from payers before filing.

Calculate the annual ISR liability using the FY2025 progressive scale: 0% on the first RD$416,220, 15% on RD$416,220–624,329, 20% on RD$624,329–867,123, and 25% above RD$867,123 (top marginal rate 25%). Under the ordinary regime, net taxable income = gross income minus deductible expenses. Under RST Ingresos, taxable income = 60% of gross income. Subtract all withholding credits (retenciones) to arrive at ISR due. Prepare Form IR-1 for submission via the DGII Oficina Virtual (OFV) by 31 March.

Submit the IR-1 via the DGII Oficina Virtual (OFV) and pay any balance due by 31 March. Late payment attracts a 10% surcharge in the first month plus 4% per additional month, plus 1.10% monthly indemnizatory interest on the unpaid balance. Confirm that all monthly ITBIS returns (IT-1, due 20th of each month) are current. Retain all NCF invoices, bank statements, certificaciones de retención, and the filed IR-1 for a minimum of 10 years under the Código Tributario.