2026 Tax Reforms in the Dominican Republic: Economic Growth Law

Ulises Cabrera | The Dominican Republic’s Law on Measures for Economic Growth, Tax Simplification and Mitigation of the International Crisis, enacted in June 2026, introduces significant amendments to the country’s tax system. The reform includes new personal income tax brackets, taxes on capital gains and real estate transactions, temporary special contributions, and changes to customs duties and foreign trade rules, with implications for companies, professionals and investors.

Personal Income Tax (ISR)
Beginning with fiscal year 2027, resident and domiciled individuals will be subject to a new progressive income tax scale. Annual taxable income of up to RD$480,000 will remain exempt. Income between RD$480,001 and RD$685,000 will be taxed at 15% on the excess; income between RD$685,001 and RD$910,000 will be subject to RD$30,750 plus 20% of the excess; income between RD$910,001 and RD$4,800,000 will be taxed at RD$75,750 plus 25% of the excess; and income above RD$4,800,000 will be taxed at RD$1,048,250 plus 27% of the excess. The brackets will be adjusted annually for inflation.

The law also modifies the voluntary Simplified Tax Regime (RST), which applies to individuals providing professional or independent services, the agricultural sector, small businesses with annual revenue of up to RD$30 million under the income-based modality, legal entities and sole-owner businesses in the services and production sectors, and limited liability companies (SRLs) whose shareholders are individuals. The regime simplifies tax compliance through income- or purchase-based tax determination.

Corporate taxpayers classified under Article 297 will be permitted to apply accelerated depreciation to qualifying machinery and equipment by using double the depreciation rates established under the current tax legislation. The measure seeks to encourage investment in productive assets.

Individuals filing personal income tax returns will also be allowed to deduct documented educational expenses supported by valid invoices issued by educational institutions, up to 10% of taxable income.

Capital gains and gaming prizes
The law establishes a 10% one-time and final tax on capital gains derived from the sale of real estate owned by resident or domiciled individuals. The tax must be settled within six months from the completion of the property transfer and cannot be credited or deducted against other income tax liabilities.

It also introduces differentiated tax rates on lottery and gaming prizes. Lottery prizes, electronic games of chance and similar games will be taxed at 25%, while slot machine prizes will be subject to a 15% rate. Sports betting prizes of up to RD$200,000 remain exempt; prizes between RD$200,001 and RD$600,000 will be taxed at 15%; and prizes exceeding RD$600,000 will be taxed at 25%. The tax constitutes a final payment, with slot machine taxes payable monthly before the tax authorities.

From fiscal year 2027, proceeds from life insurance policies will become exempt from gains tax, replacing the previous 11% tax treatment.

Customs and foreign trade
The departure tax (exit tax) will increase from US$20 to US$30 per person. The tax applies to all individuals leaving the country through authorized points of departure and will be collected by airlines and international transportation service providers. The applicable exchange rate will be determined by the Central Bank of the Dominican Republic.

The reform also expands customs and VAT exemptions by incorporating additional tariff classifications covering construction materials, including asphalt, asphalt cement and similar products, to facilitate infrastructure projects.

Special taxes and other measures
A temporary special contribution will apply during fiscal years 2026 through 2028 to taxpayers with annual income of at least RD$1 billion. The contribution will equal 30% of taxable net income and is intended to generate extraordinary revenue to mitigate the international crisis.

The law also introduces a revised tax scale for casinos based on the number of gaming tables, beginning at RD$70,000 per table per month for establishments operating between one and 15 tables, with additional rates for casinos with greater operating capacity.

A new contribution will apply to each metric ton of liquefied petroleum gas (LPG) imported or distributed.

In addition, taxpayers may elect the tax regime they consider most appropriate, although they may not benefit simultaneously from more than one incentive regime with respect to the same economic activity, investment or transaction.

Regulatory and administrative measures
Public institutions responsible for administering tax exemption or incentive laws must submit a cost-benefit analysis to the Ministry of Finance and Economy before authorizing new tax incentives.

The reform also extends the Simplified Tax Regime (RST) to VAT (ITBIS) obligations for taxpayers participating in that regime who are subject to the tax.

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