Starting this Friday, the transfer tax of 0.20% begins to apply in the Dominican Republic, but it does not affect transfers between accounts of the same account holder. This measure, part of Law 30-26 on Pro-Economic Growth Measures, seeks to simplify the tax system and mitigate the effects of the international crisis, although it maintains the transfer tax for operations with third parties.
What operations are exempt from ?
The transfer tax does not apply in the following cases: transfers between accounts of the same owner, cash withdrawals, tax payments, social security, pensions, international transfers (with documentation), stock market operations, and joint accounts belonging to the same parties. Payment of checks and transfers between one’s own personal accounts are also excluded.
- Exempt: transfers between accounts of the same account holder
- Exempt: cash withdrawals and social security payments
- Exempt: international transfers with approved documentation
Cases where the applies and how it is withheld
The transfer tax is triggered on loan payments, third-party credit cards, transfers between accounts with third parties, and withdrawals by authorized third parties. The withholding is made automatically on the issuing account, which is different from the 100-peso fee for fast transfers between different banks.
Legal framework and control of the
Law 30-26, promulgated by the Executive Branch, establishes the transfer tax as part of the pro-growth fiscal measures. The DGII is the entity that withholds the tax, while banks act as withholding agents. If a user detects that the transfer tax was applied to one of their own accounts, they can file a claim with the financial institution based on Rule 04-2019.
In summary, the transfer tax has clear exemptions for own accounts, but is withheld in operations with third parties. Knowing these rules prevents involuntary charges and optimizes the use of banking services in the DR.
