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5.4. Tax Base for Non-Resident Entities

Non-resident entities operating in the Dominican Republic through a permanent establishment ('PE') are subject to tax on income sourced from the Dominican Republic. Non-resident entities deriving income from sources in Dominican Republic without a permanent establishment are subject to withholding tax on their income. (See Sec. 8.2.2. below for tax rates). Payments made to non-residents for the import of goods are considered as income derived from a foreign source and are not subject to withholding tax.

Non-resident insurance companies providing insurance services to resident companies / individuals are taxed on deemed income equal to 10% of gross premiums derived from such services. Non-resident communication companies are taxed on deemed income equal to 15% of their gross income derived from such services in the country.