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Countries › Dominican Republic › Guide › 6. Taxes › Free zone taxation in the Dominican Republic: exempt exports, 3.5% on local sales and 5% for commercial zones

Free zone taxation in the Dominican Republic: exempt exports, 3.5% on local sales and 5% for commercial zones

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

Free zone companies are 100% exempt from income tax on their regime, but pay a 3.5% tax on gross local sales. Commercial free zones under the older law pay 5% on gross sales. Moving goods into a zone counts as export for ITBIS and out of a zone as import, and special free zone classifications were suspended in 2012.

USD figures use the Banco Central de la República Dominicana reference selling rate of RD$60.8594 per US dollar for 28 October 2026, the latest row in its published rate file on the verification date, rounded to the cent.

Key facts

Free zone local sales tax3.5 % of gross salesLey 253-12 art. 31, as of 2026-10-30 · in force
Commercial free zone tax5 % of gross salesLey 253-12 art. 35, as of 2026-10-30 · in force

The rule

1. Operators and companies get 100% exemption from income tax and listed taxes such as construction, loan, property transfer and company formation taxes.Ley 8-90, art. 24, 1990-01-15 official text · verified 2026-10-30
2. Free zone companies selling goods or services to anyone in the Dominican Republic pay 3.5% income tax on gross local sales.
Example: Local sales RD$10,000,000: tax RD$350,000. / Local sales US$164,313.15: tax US$5,750.96.Ley 139-11 art. 11 paragraph III as amended by Ley 253-12 art. 31, art. 31, 2012-11-09 official text · verified 2026-10-30
3. Commercial free zone companies under Ley 4315 pay 5% income tax on gross sales.Ley 253-12, art. 35, 2012-11-09 official text · verified 2026-10-30
4. The classification of special free zones under Ley 8-90 is suspended.Ley 253-12, art. 36, 2012-11-09 official text · verified 2026-10-30
5. The buyer from a company under a special regime is the taxpayer for ITBIS and selective taxes, and the seller is the withholding agent.Ley 253-12, art. 43, 2012-11-09 official text · verified 2026-10-30
6. Moves from the national territory to an industrial free zone are exports for ITBIS, and moves out of a zone are imports.Ley 11-92, Código Tributario, art. 357, 1992-05-16 official text · verified 2026-10-30
7. The 10% dividend withholding reaches free zone companies only if a DR-CAFTA country has approved a tax of the same nature on similar regimes.Ley 11-92, Código Tributario, art. 308 paragraph III, 2012-11-09 official text · verified 2026-10-30
SellerSaleTax
Free zone, local saleRD$10,000,000RD$350,000
Commercial free zoneRD$10,000,000RD$500,000
Ordinary company at 10% marginRD$10,000,000RD$270,000

Tax on the same sale

Worked example

  • A free zone maker selling RD$10,000,000 (about US$164,313.15) locally owes RD$350,000 (about US$5,750.96) on gross sales, whatever its margin, so a thin margin business can pay more than an ordinary company would.

Step by step

  1. Get the licence from the Free Zones Council.
  2. Separate local from export sales.
  3. Charge ITBIS as agent on local sales.
  4. Pay the solid waste contribution.

Common traps

  • The local sales tax is on gross sales, not profit.
  • Ley 8-90 sets conditions and customs charges for sales into the local market, so read it with the 3.5% tax.
  • Being in a zone does not remove the solid waste contribution.

Sources

Related pages

Related: Dominican Republic country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

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