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August 26, 2021

Dominican Republic enacts Law No. 163-21 promoting the trading of publicly-offered securities on the Dominican Republic Stock Exchange

Taxpayers may benefit from tax incentives for the trading and transfer of shares on the Dominican Republic Stock Exchange. Most of the tax incentives apply for three years from the Law's effective date.

On August 6, 2021, the Dominican Republic enacted Law No. 163-21 (the Law), which encourages the placement and trading of publicly-offered securities on the Dominican Republic Stock Exchange. This Law applies throughout the national territory with various applicability dates. According to the Law, its ultimate aim is to encourage the involvement of the private sector in the Dominican Republic's economic recovery from the COVID-19 crisis. The Law went into effect August 9, 2021.

Capital gains tax rate

Capital gains derived from shares that are traded on the stock exchange and are part of a public offering will be taxed at a rate of 15% for the first three years from the Law's effective date. After that period, capital gains will be taxed according to the rate established by the Dominican Tax Code (i.e., 27%).

Exemption from capital gains tax on capital increases

In accordance with Law No. 163-21, companies listed on the stock exchange that have capital increases resulting from public offerings of shares will be exempt from capital gains tax for three years from the Law's effective date.

Withholding of taxes

Withholding tax will not apply to capital gains from a sale of shares that entered the stock exchange as part of a public offering. In addition, stock exchanges and centralized securities depots must forward to the Dominican Tax Authority information on the purchase and sale of shares, under the conditions outlined in the Law.

Fiscal-neutral effect

Capital gains will be triggered at the time of the shares' sale, not when the shares remain in the hands of the same holder, even if their market value changes. This provision will apply equally to shares, regardless of whether they are registered in the stock exchange.

Taxation of trust funds

Value-added tax or real estate transfer tax will not apply to the transfer of goods or assets for the formation of a trust fund.


Contact Information
For additional information concerning this Alert, please contact:
Ernst & Young, Dominican Republic
   • Ludovino Colón (
   • René González (
Latin American Business Center, New York
   • Lucas Moreno (
   • Ana Mingramm (
   • Pablo Wejcman (
   • Enrique Perez Grovas (