Dominican Republic

Corporate - Deductions

Last reviewed - 04 December 2023

Depreciation and amortisation

Depreciation allowances on fixed assets are determined by the declining-balance method at the following rates:

Assets Depreciation rate (%)
Buildings 5
Office furniture, fixtures, computers, light vehicles, etc. 25
Other assets not specified 15

The fiscal book value is adjusted by the annual inflation rate.

Amortisation of intangible assets (e.g. patents, author's rights, drawings, franchises, contracts without set expiration dates) is deductible as long as the amortisation of the fiscal cost of each intangible good, including patents, copyrights, drawings, models, contracts, and franchises whose life has a defined limit, should reflect the life of said good and the straight-line recovery method.


See amortisation of intangible assets in the description of Depreciation and amortisation above.

Start-up expenses

The Dominican tax legislation does not establish specific provisions regarding the deduction of start-up expenses. The general deductions rule is the accrual method.

Interest expenses

Interest expenses are deductible, provided they are associated with the acquisition, maintenance, and/or exploitation of taxable income generating assets.

The interest expense deduction is limited when the beneficiary is a non-resident located in a tax haven or in a low-taxation jurisdiction, or when the interest is not otherwise subject to tax by the recipient. Thin capitalisation rules may also limit the deduction (see Thin capitalisation in the Group taxation section).

Bad debt

Bad debts are deductible only in the year the loss is suffered. Authorisation may be obtained to use an alternative method, which consists of creating a provision allowing the deduction only in the year the bad debts qualify as doubtful, up to 4% of the balance of the accounts receivable at year-end.

Charitable contributions

Donations made are tax deductible in the Dominican Republic, up to 5% of the taxable income and if the beneficiaries are registered charitable contributions.

Fines and penalties

Fines and penalties are considered non-deductible expenses.


Income taxes are not deductible. Other taxes can be deductible; however, interest and surcharges imposed on taxes are not deductible in general.

Other significant items

For tax purposes, the following significant items should be considered:

  • Changes in methods are not allowed without prior approval.
  • Bonuses paid to employees within 120 days after the end of the taxable year are deductible for the year just ended.

Net operating losses

The carryforward of losses of legal entities can be used to offset profits up to the fifth year following the year in which the losses were generated, with a maximum amortisation of 20% in each year. For the fourth year, the deduction allowed should not exceed 80% of the net taxable income. In the fifth year, the percentage is 70%.

There is no carryback loss mechanism in the Dominican Republic.

Payments to foreign affiliates

Payments to foreign affiliates for royalties, interest, or service fees are deductible, provided that the 27% WHT was paid (10% on interest).