Income Tax (ISR) in the Dominican Republic: Definition and Characteristics

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In the Dominican Republic, as in many countries around the world, Income Tax (ISR) plays an essential role in collecting revenue for the State and in financing essential public services. This tax, as its name indicates, taxes the income received by individuals and legal entities within the Dominican territory.

To better understand this tax and its characteristics, it is dentist database to examine its definition and the most relevant aspects surrounding it.

Table of contents

Definition of ISR in the Dominican Republic:
Characteristics of the ISR in the Dominican Republic:
1. Tax on Individuals and Legal Entities:
2. Tax Scales and Rates:
3. Deductions and Exemptions:
4. Declaration and Payment:
5. Control and Supervision:
Publication summary.
Definition of ISR in the Dominican Republic:
Income Tax in the Dominican Republic is a direct tax levied on income , that is, on the income obtained by individuals and legal entities within the country. This tax is governed mainly by Law 11-92 , subsequently modified by other tax laws and regulations, which establish the tax rates, the concepts subject to taxation and the procedures for their declaration and payment.

Characteristics of the ISR in the Dominican Republic:
Below we present some of the most important characteristics of this type of tax. Let's take a look!

1. Tax on Individuals and Legal Entities:
The Dominican ISR affects both individuals and legal entities that generate income within the national territory. For individuals, salaries, professional fees, capital income, among others, are considered. For legal entities, profits obtained from commercial, industrial, financial activities, among others, are taxed.

2. Tax Scales and Rates:
Income tax in the Dominican Republic is calculated using a progressive scale system, where tax rates increase as income increases. Tax rates and brackets vary depending on the taxpayer category and type of income. Individuals typically have a higher maximum tax rate than corporations.

3. Deductions and Exemptions:
Dominican tax law provides for certain deductions and exemptions that allow a taxpayer to reduce his or her taxable income. These may include medical and educational expenses, donations to charities, among others. Companies may also deduct certain expenses necessary for generating income.

4. Declaration and Payment:
ISR taxpayers in the Dominican Republic are required to file an annual tax return detailing their income and corresponding deductions. Depending on the taxpayer's income and category, they may be subject to quarterly advance payments. Failure to comply with these obligations may result in financial and legal penalties.