Although it only comes into play once a year, this should be the focus of all tax policies of companies and individuals engaged in business activities, as it is the only tax levied on income earned during a fiscal year. Corporate income tax is currently set at 27%, and individual income tax is assessed on a sliding scale based on income. Since it is an annual tax, it is important to continually monitor companies’ financial projections in order to take advantage of the tax benefits offered by the Dominican tax system.
The fiscal year-end closing is a procedure established to account for profits and losses over a 12-month period and can vary according to the date set for each company. At the time of incorporation, companies can select from the following dates for their fiscal year-end: a) March 31; b) June 30; c) September 30; or d) December 31. Companies have 120 days after the respective deadline to file their IR-2 returns and make the corresponding payment.