Taxation of Foreign Income and Transfer Pricing in the Dominican Republic

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Overview

The Dominican Republic does not impute profits from a foreign subsidiary to a parent company that is tax resident in the country. There are no specific transfer pricing rules in place, except for the requirement that goods and services exchanged within an economic group must be performed at market value.

Taxation of Imports and Exports

• Imports of goods into the Dominican Republic are subject to customs duty, consumption tax, and a 16% ITBIS (Internal Tax on Goods and Services).
• The rates for these taxes vary depending on the type of goods being imported.
• Exports of goods from the country are not taxed.

Double Taxation Agreements

The Dominican Republic has a double taxation agreement with Canada.

Competition Law

Law 42-08 prohibits and sanctions all practices, acts, and agreements between economic agents that have the objective or effect of imposing unjustified barriers in a local market. The law also sanctions the abuse of dominant positions by economic agents and defines what constitutes illicit behavior in commercial activities.

Intellectual Property Rights

The Dominican Republic recognizes the following intellectual property rights:

Patents

• A patent must be novel, involve an inventive step, and be capable of industrial application.
• Protection lasts for 20 years from the date of filing.

Trade Marks

• A trade mark must be distinctive and not create confusion regarding the services and products it represents.
• Protection is achieved by registration at the National Office of Industrial Property and lasts indefinitely in renewable 10-year periods.

Commercial Names

Protection is achieved by registration at the National Office of Industrial Property and lasts for 10 years, with the option to renew for further 10-year periods.

Marketing Agreements

Agency, distribution, and franchising agreements are regulated by specific laws.

E-Commerce

The Electronic Commerce, Documents, and Digital Signatures Law 126-02 regulates all commercial relationships using data messages or similar methods. Decree No. 335-03 has enacted its Regulation for Application.

Data Protection

There is no specific data protection law in the Dominican Republic, but the ISO 17799 standard provides recommendations and principles for organizations to follow.

Product Liability

The Dominican Republic does not have specific rules on product liability. However, a civil claim can be brought under the Civil Code, requiring proof that damage was caused by a defective product manufactured by the defendant.