This guide reviews the current (2025) availability and tax obligations surrounding the sole proprietorship status, officially known as Persona Física con Negocio de Único Dueño, in the Dominican Republic (DO). It covers key requirements, registration process, income tax brackets, and VAT obligations for individual business owners.
Sole Proprietorship Status in the Dominican Republic: Key Features
The status Persona Física con Negocio de Único Dueño is widely used by individuals who wish to conduct business without forming a separate legal entity. This is a straightforward option, accessible to ordinary citizens, and allows full business operations, including invoicing, contracting with clients, and commercial activity under the individual’s own name.
Key aspects of this business status:
- Personal Liability: The business owner is personally responsible for all business obligations and debts.
- Separate Registration: Registration with the Dominican tax authority (DGII – Dirección General de Impuestos Internos) is required.
- Taxpayer Identification: A unique taxpayer number (RNC) is provided upon registration.
Sole Proprietorship Registration Requirements
- Must be an individual (not a corporation)
- Register with the DGII (Dirección General de Impuestos Internos)
- Obtain and use an RNC (Registro Nacional de Contribuyentes) number for all tax purposes
Income Tax Brackets for Sole Proprietors (2025)
Sole proprietors in the Dominican Republic are taxed using the personal income tax progressive scale. These rates apply to net income for the fiscal year 2025, using the local currency (Dominican Peso, DOP):
| Taxable Income (DOP) | Rate (%) |
|---|---|
| Up to RD$416,220 | 0% |
| RD$416,220.01 – RD$624,329 | 15% |
| RD$624,329.01 – RD$867,123 | 20% |
| Above RD$867,123 | 25% |
For international readers, as of January 2025, the exchange rate is approximately RD$1 = $0.017 USD. For example, RD$416,220 is roughly $7,075 USD.
Value Added Tax (ITBIS) Obligations
Business owners under this status are also required to charge and remit ITBIS (the Dominican VAT) at a standard rate of 18% on most goods and services supplied. Filing and payment deadlines are determined by the DGII, and compliance is monitored actively.
| Tax Type | Rate (%) | Notes |
|---|---|---|
| ITBIS (VAT) | 18% | Applies to most goods and taxable services |
Process Overview: How to Register as a Sole Proprietor
- Register with the Directorate General of Internal Taxes (DGII) as an individual business owner.
- Obtain a personal RNC (tax identification number) through the government portal or DGII’s local offices.
- Ensure all future business invoices and official documents include your RNC.
- Keep financial records for annual reporting and tax compliance.
- Regularly file and pay income tax (ISR) and ITBIS as required by the Dominican tax calendar.
Practical Tax Considerations for Sole Proprietors
- The simplicity of the sole proprietorship structure makes it a preferred choice for local consultants, freelancers, traders, and service providers.
- There are no separate corporate tax filings; all income and deductions are reported under the individual’s name.
- All personal and business assets are exposed to creditor claims, given the lack of a distinct legal entity.
- The RNC number is essential for every official transaction, including receipts, payroll, and tax returns.
Pro Tips for Managing Your Sole Proprietorship in the Dominican Republic
- Organize Documentation: Keep clear financial records and copies of all invoices issued and received. This simplifies tax filing and proves compliance if audited by DGII.
- Regularly Review Tax Brackets: The progressive income scale can result in higher marginal rates as income grows. Plan ahead for estimated payments and keep abreast of possible regulatory updates.
- Stay Updated on ITBIS Applicability: Ensure your goods and services are correctly categorized for VAT and promptly remit collections to avoid fines or penalties.
- Register Promptly: Immediate registration with the DGII avoids informal business risks and enables proper invoicing from the start.
- Consult the DGII Portal: Use the DGII’s main website (https://www.dgii.gov.do/) regularly for official updates and procedural guides.
Key Resources
In summary, the Dominican Republic permits straightforward access to the sole proprietorship regime through “Persona Física con Negocio de Único Dueño.” Registration is managed via the DGII, and business owners must follow the progressive personal income tax rates and the 18% ITBIS. The main practical considerations are the personal liability for business debts and the responsibility to maintain full compliance with documentation and tax filings. Choosing this status offers simplicity and accessibility, making it popular among professionals and independent operators in the Dominican Republic for 2025.