Tourism in the Dominican Republic - a legal guide - Pellerano ...

companies. Individuals benefit from an exemption for
income of up to RD$125,256 per year. Above this
amount the tax rate increases in proportion to the
income, as follows: 15% for income from RD$125,256
to RD$208,760, 20% for income from RD$208,760.01 to
RD$313,140, and 25% for income exceeding
RD$313,140 per year. The employer must withhold this
tax from the salary paid to the employee.
Tax on the Transfer of Industrialized Goods and
Services (ITBIS)
ITBIS applies to (i) the transfer of industrialized
goods, calculated on the net transfer price plus
accessory services, (ii) the import of industrialized
goods, calculated on the CIF value of the goods plus
custom duties, and (iii) the provision and lease of
services, calculated on the value of service excluding
mandatory tips.
The tax reform increased the ITBIS rate from 8% to
12%. Advertising services are taxed with a lower rate
of 6%.
A wide range of agricultural and livestock products
have been exempted from the payment of ITBIS, such
as living animals, meat, fishes for reproduction, milk
products, plants to cultivate, vegetables and fruits for
public consumption, coffee, corns, milled products,
sugar, cacao, etc. Also exempted are fuel and energy,
books and magazines, as well as personal computers
and accessories.
Services excluded are education, culture, health,
financial (excluding insurance), pension plans, ground
transportation, electricity, water and garbage collection,
rent of houses, and personal care. Tourist services are
subject to this tax.
Selective Consumption Tax
This tax applies to the transfer of certain goods
manufactured in the country, to the import of certain
products and to the provision of certain services.
Examples of these goods and services are alcohol and
tobacco derivatives, vehicles, jewelry, certain home
appliances, etc.
The tax rate ranges from 10% to 80%, being the
higher rates those for vehicles and certain luxury items.
Labor laws
The Labor Code, contained in Law 16-92 of 17 June
1992 regulates the relations between companies and
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their employees. The Ministry of Labor ("Secretaria de
Estado de Trabajo - SET") sees to the compliance of
these provisions, while Labor Courts have jurisdiction
over labor disputes.
Foreign workers
At least 80% of the workers of a company should
be Dominican citizens. Supervising officers should
preferably be Dominicans, but there are no restrictions
at manager level. When a Dominican citizen substitutes
a foreigner in an employment position the Dominican
employee will be entitled to the same salary, rights and
conditions as the foreign employee.
Working conditions
The normal working week is 44 hours, with a
working day of 8 hours. Mandatory paid leaves of
absence are the following: 5 days in the event of
marriage, 3 days in the event of death of a close family
member, and 2 days for the worker whose wife gives
birth. Furthermore, pursuant to Law 97-97, workers
who have completed one year of employment are
entitled to a paid vacation of 14 working days.
Labor laws set out appropriate measures to protect
employees against sexual harassment, and in the event
of maternity.
Dominican labor laws set forth a minimum wage for
private sector employees, which is periodically fixed by
the National Salaries Committee of the Ministry of
Labor. The current monthly minimum wage is RD$3,416
for companies with assets over RD$500,000. Other
minimum wages are fixed for certain sectors. This is
the case of the tourist sector (RD$3,030 for companies
with assets over RD$500,000).
In the event of overtime, night and holiday work,
the premium to be paid by the employer over the basic
wages of the employee is 35% for overtime, 15% for
night work, and 100% for overtime implying an increase
of more than 68 working hours per week, as well as for
work on Sundays and holidays.
All employees are entitled to receive, by December
20 at the latest, an additional month's salary. They are
also entitled to receive a 10% participation in the yearly
net profits of the company.
Dismissal of employees
During the first three months of employment
workers can be dismissed without the employer having
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