do business in the Dominican Republic - Pellerano & Herrera

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DOING BUSINESS INTHE DOMINICAN REPUBLICdered or provided any service in an independent manner. Said payment shall correspondto taxes retained to personnel during the month immediately precedingthe month when payment was made. Payment shall be made by cashier’s checkissued to the Internal Revenue Collector.Business and Manufacturing EnterprisesDuring the first 15 days of each month all individuals or corporations and soleowner businesses whose actual tax paying rate (the one resulting from dividingliquidated taxes during the fiscal period with the gross income for the same fiscalperiod) were less than or equal to 1.5% shall pay the appropriate advances onthe basis of twelve equal installments resulting from applying 1.5% of such grossincome as were declared during the preceding fiscal year. If the actual tax payingrate were higher than 1.5%, one twelfth of such tax as were liquidated in the precedingincome-tax report shall be paid in advance on a monthly basis.No 1.5% advance shall be paid by any individuals engaged in business or manufactureif their annual income was equal to or under RD$5,000,000.00. Thisadvance shall be paid by cashier’s check issued to the Internal RevenueCollector.Tax to Salaried EmployeesAn income tax shall be assessed on any income accruing from any work renderedunder a relationship of dependency, by practicing a profession or liberal occupation,commercial or investment operations or financial gains abroad.A Table ofRetentions to individuals is provided under Article 296 of the Tax Code, thereinproviding for the following retentions:Income of up to RD$276,422.00RD$276,422.01 to RD$414,632.00RD$414,632.01 to RD$575,878.00From RD$575,878.01 to RD$900,000.00From RD$900,000.01 onwardsexempt15% (RD$20,732.00)20% of the excess(RD$32,249 plus RD$20,732)25% of the excess(RD$81,031 plus RD$52.981)30% of the excess plusRD$134,012.00Until March 15 of each year,taxpayers shall file separately their income tax returnon taxes retained and paid during the preceding calendar year, for salaries paidto employees and to any independent personnel having performed any kind oflabor or service.The 30% maximum marginal rate provided shall be reduced annually down to25% of assessable net income or taxable income, upon applying the followingschedule:For the 2007 fiscal year 29%For the 2008 fiscal year 27%For the 2009 fiscal year 25%94
Pellerano & HerreraAttorneys at law95Individuals receiving income from different sources shall file an income taxreturn of their income by March 31 each year. Such income tax report shallinclude all income accruing during the preceding calendar year.The following shall be exempted from income tax payment:Income of up to RD$276,422.00 (amount to be adjusted for inflation annually)The salaried employees with income not greater than the exemptionaforementioned.Any dividends paid by a stockholding company to its shareholders either inshares or cash whenever such retention is dully executed in accordance toArticle 308 of the Tax Code shall have been made.Interest paid to individuals or corporations by financial entities regulated bythe Superintendence of Banks and the Superintendence of Securities.Taxes to CorporationsCorporations domiciled in the Dominican Republic shall pay thirty per cent(30%) on their taxable income for the fiscal year 2006. According to these articlesthe following shall be deemed as corporations:a) Capital associations;b) Public sector enterprises on their income of a business nature and other entities;c) Non divided estates;d) Partnershipse) Factual associationsf) Irregular associationsg) Any other manner of organization not expressly provided herein the purposewhere of were to make a profit or gain that were not expressly declared tobe exempted from this tax.Such tax as is assessed to the above cited corporations shall be reduced annuallydown to 25% of net income upon applying the following schedule:For the 2007 fiscal year 29%For the 2008 fiscal year 27%For the 2009 fiscal year 25%Fiscal LossesIn the event of any losses sustained in its fiscal exercise by a corporation, sameshall be deducted from any gains obtained during the fiscal periods immediatelyfollowing any such losses, provided however these shall not extend over fiveyears, according to the following rule:In no case shall losses proceeding from other entities where a tax payer shallhave carried out any process of reorganization be deducted from any current orfuture period., nor shall any as resulted from any non deductible expenses.Losses may only be deducted up to 20% of their total amount during the firstthree periods, at the rate of 20% in each period in an independent manner (noncumulative). No losses shall be deducted during the fourth and the fifth periodexcept under the following conditions:
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DOING BUSINESS INTHE DOMINICAN REPU
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FOREWORDA place to invest ...The Do
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Pellerano & HerreraAttorneys at law
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INTERNATIONALTRADEInternational tra
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Page 57 and 58: MAININVESTMENTSECTORSThe Dominican
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Page 143 and 144: Design: Lourdes Saleme y AsociadosP
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