A company is considered resident when it is registered or incorporated under the laws of the Dominican Republic. Foreign entities are considered as domiciled when they are registered in the Dominican Republic as a branch or PE, and they are subject to local tax in the same manner.
Permanent establishment (PE)
According to local tax legislation, which follows the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital, a PE is defined as a fixed place of business where a foreign entity or individual performs all or part of its activities, such as:
- An address in the Dominican Republic.
- Petroleum or gas well.
- Quarry or any other natural resource extraction place.
- Assembly projects, including supervision activities of such projects.
- Construction/supervision activities derived from the sale of machinery and equipment when its cost exceeds 10% of the sale price of such equipment.
- Consulting services, provided these exceed six months within the same fiscal period.
- Representatives or dependent or independent agents, when these act on behalf of the entity.