The LatAm Thread

Countries › Dominican Republic › Guide › 16. What is normal abroad but not here › Tax losses are used in fixed slices

Tax losses are used in fixed slices

Last verified: 2026-10-30 · Status: Stable

Abroad losses often carry forward without a limit or a yearly slice; here they last five years, at 20% of the loss each year. A slice not used in its year is gone, and the fourth and fifth year slices are limited to 80% and 70% of income. First year losses can be used up to 100% in the second year, and DGII can lift limits in hardship.

USD figures use the Banco Central de la República Dominicana reference selling rate of RD$60.9007 per US dollar for 29 October 2026, the latest row in its published rate file on the verification date, rounded to the cent.

Key facts

Years to carry forward5 yearsLey 11-92 art. 287 k, as of 2026-10-30 · in force
Share of the loss usable each year20 %Ley 11-92 art. 287 k, as of 2026-10-30 · in force
Fourth year income cap80 %Ley 11-92 art. 287 k, as of 2026-10-30 · in force
Fifth year income cap70 %Ley 11-92 art. 287 k, as of 2026-10-30 · in force

The rule

1. Company losses are deductible from profits of the following years, for no more than five years.Ley 11-92, Código Tributario, art. 287 literal k, 2012-11-09 official text · verified 2026-10-30
2. Losses are deductible at 20% of the total per year. In the fourth year that 20% is limited to 80% of net taxable income, and in the fifth to 70%. A slice not deducted in its year cannot be used later and gives no refund. Deductions are made only on the annual return.Ley 11-92, Código Tributario, art. 287 literal k numeral 2, 2012-11-09 official text · verified 2026-10-30
3. Losses of other entities in a reorganization and losses from non deductible expenses are never deductible.Ley 11-92, Código Tributario, art. 287 literal k numeral 1, 2012-11-09 official text · verified 2026-10-30
4. Companies with a loss on the return of their first fiscal year can offset it up to 100% in the second year. Any balance follows the general mechanism.Ley 11-92, Código Tributario, art. 287 literal k paragraph I, 2012-11-09 official text · verified 2026-10-30
5. Taxpayers with losses can ask for total or partial relief from the limits, and the tax authority can agree if, in its judgment, there are force majeure or extraordinary causes.Ley 11-92, Código Tributario, art. 287 literal k paragraph II, 2012-11-09 official text · verified 2026-10-30
YearSliceLimitUsedLost
1RD$2,000,000Income RD$1,500,000RD$1,500,000RD$500,000
2RD$2,000,000Income RD$1,500,000RD$1,500,000RD$500,000
3RD$2,000,000Income RD$1,500,000RD$1,500,000RD$500,000
4RD$2,000,00080% of income: RD$1,200,000RD$1,200,000RD$800,000
5RD$2,000,00070% of income: RD$1,050,000RD$1,050,000RD$950,000

Loss of RD$10,000,000 in a later year, with income of RD$1,500,000 in each of the next five years

Worked example

  • A company loses RD$10,000,000 (US$164,201.73) after its first year, then earns RD$1,500,000 (US$24,630.26) a year for five years. It uses RD$6,750,000 (US$110,836.16) and loses RD$3,250,000 (US$53,365.56) of the loss, worth RD$877,500 (US$14,408.70) of income tax at 27%.

Step by step

  1. Forecast income by year, not in total.
  2. Schedule the five slices in the tax file.
  3. Time big one off gains for slice years if the business allows.
  4. Ask DGII for relief with evidence when a case fits paragraph II.

Common traps

  • A loss in the first fiscal year has better treatment, so document that return carefully.
  • Merging into a loss company does not move losses from another entity.
  • Years one to three have no income percentage limit, so a slice can absorb all income.
  • Income limits apply only to the fourth and fifth year slices.

Sources

Related pages

Related: Dominican Republic country profile · live dashboard · central bank and release calendar · our posts on X

← The 1% asset tax works as a minimum taxPaying local individuals means withholding →

Get rule changes weekly

Free. One email a week from The LatAm Thread.

One more step after you press the button: we take you to Substack, where your email is already filled in. Confirm there to start. No spam, unsubscribe anytime, we never share your address. By subscribing you agree to the privacy policy.