The Dominican Republic's DGII has launched a public consultation on draft rules clarifying the tax treatment of software transactions, including licensing, SaaS, associated services and cross-border payments under Law No. 30-26.
The Dominican Republic’s General Directorate of Internal Taxes (DGII) has launched a public consultation on a draft general rule establishing the tax treatment of software transactions, introducing new rules for software acquisitions, licensing, SaaS, associated services and cross-border payments following the enactment of Tax Reform Law No. 30-26.
Public consultation launched
On 14 July 2026, the Dominican Republic’s General Directorate of Internal Taxes (DGII) opened a public consultation on a draft General Rule (Norma General) that establishes the tax treatment applicable to software transactions.
The proposal implements key changes introduced by Articles 21 and 22 of Law No. 30-26 on Tax Reform and is intended to provide a comprehensive framework governing the taxation of software acquisitions, licensing arrangements and related services.
The consultation is open until 15 September 2026 in accordance with Law No. 167-21 on Regulatory Improvement and Simplification of Procedures, as amended by Law No. 14-25, together with the implementing regulations under Decree No. 486-22 and the administrative procedure provisions of Law No. 107-13.
Draft rule clarifies software transaction categories
The proposed regulation reflects the transition from software distributed on physical media to modern digital licensing and cloud-based delivery models.
It applies to individuals and entities that acquire, lease or commercialise software and associated services, distinguishing between several types of transactions:
- Software acquisition involves the transfer of intellectual property ownership.
- Software licensing, grants a stable or long-term right to use software without transferring ownership or source code.
- Software lease arrangements, including recurring subscriptions and Software as a Service (SaaS).
- Associated services, such as implementation, customisation and maintenance.
The DGII states that these distinctions are intended to ensure that each type of transaction receives the appropriate tax treatment.
New income tax rules for domestic and cross-border payments
The draft introduces detailed income tax (ISR) rules for software-related payments.
Payments made to non-resident providers for software licences and lease arrangements would be subject to a 15% withholding tax, treated as a final payment. This reflects the reduction introduced by Law No. 30-26, replacing the previous 27% withholding rate.
However, payments made to foreign suppliers for the outright acquisition of software ownership and intellectual property rights would not be subject to the 15% withholding.
To claim a tax deduction for foreign software payments, taxpayers would be required to support the transaction with a Comprobante para Pagos al Exterior (Proof of Foreign Payment).
For domestic providers, income derived from software licensing and associated services would form part of the normal income tax base.
Where software is recognised as an intangible asset with a determinable useful life, it would be amortised using the straight-line method.
ITBIS treatment distinguishes licences from standalone services
The draft also clarifies the application of the Value Added Tax (ITBIS).
Software acquisitions and licensing arrangements would not be subject to ITBIS because software is treated as an intangible asset. This exemption would apply to both domestic and international transactions.
Services supplied together with a software licence, such as updates or support included within the licensing arrangement, would likewise remain outside the scope of ITBIS.
By contrast, technical services invoiced separately from a software licence or acquisition—such as independent implementation or consulting services—would be subject to ITBIS when supplied in the domestic market.
Documentation and reporting obligations strengthened
The proposed regulation introduces extensive documentation requirements designed to ensure that transactions reflect their economic substance.
Where a contract contains multiple elements, such as software licences, hardware, training and technical services, taxpayers would be required to identify each component separately in contracts or invoices so that the correct tax treatment can be applied to every element.
Taxpayers would also be expected to maintain a comprehensive evidentiary file containing commercial, legal and technical documentation demonstrating the true nature of each software transaction beyond the supporting invoice.
In addition, payments made to foreign suppliers would continue to be reportable through Formato 609 within the applicable statutory deadlines.
Effective date
The General Rule will enter into force upon its official publication following completion of the public consultation process and will repeal any previous provisions that are inconsistent with the new framework.
Earlier, DGII issued Notice 10-26, setting out the implementation schedule for key provisions of Law 30-26 and confirming that several tax measures will take effect from 1 July 2026.
