Dominican Republic: New law regarding placement and sale of public securities in Dominican stock market

The Dominican executive branch has enacted Law 163-21, regarding the placement and sale of public securities in the Dominican stock market.

The law has been introduced with the aim of developing and expanding the Dominican Republic stock market.

• The law provides an exemption regarding the local capital increase tax, insofar as such increase is performed by listed companies and through a public offering of shares, during the three years counted from the entry into force of Law 163-21.
• Any income received or accrued by a seller of shares listed in the Dominican stock market, will not be subject to any withholding taxes, in connection to the capital gains tax resulting from such operation.
• Any resulting capital gain is to be reported by the seller within the corresponding annual corporate or individual income tax return, as applicable.
• The capital gains tax applicable to the sellers of shares registered in the Dominican stock market will be levied at 15%, exclusively for a period of three years, counted from the entry into force of the law.
• The corporate or individual income tax for the income generated as a result of the sale of listed shares, will be calculated in accordance with the value upon its transfer, regardless of the variations that may occur in their market value.

Read an August 2021 report [PDF 242 KB] prepared by the KPMG member firm in the Dominican Republic