DR Rental Income Tax Without CONFOTUR: ISR, Withholding and ITBIS

Yes, your Airbnb income is taxable in the Dominican Republic if the property doesn't have CONFOTUR, and that holds even if you live abroad and the money lands in a US or European bank account. The rate depends on who holds title. An individual pays a progressive 0–25% scale with a generous exempt bracket, while a company (SRL or EIRL) pays a flat 27% on net income. Short-term stays add a second question most agencies never raise: whether 18% ITBIS (the Dominican VAT) applies to the nightly rate.

This guide covers the 2026 rules for owners of resale condos, older villas and any unit outside a classified tourism project, with a worked example you can check line by line.

01How Is Rental Income Taxed in the DR Without CONFOTUR?

Without CONFOTUR, rental income in the Dominican Republic is subject to income tax (ISR). For 2026, individuals pay 0% on the first RD$416,220 of net taxable income, then 15%, 20% and 25% on higher slices. A company pays a flat 27%. Short-term stays may also attract 18% ITBIS, and a guest or tenant that is a company may withhold tax at source.

These are the rates in force for fiscal year 2026, not permanent figures. Ley 30-26, promulgated on 18 June 2026, phases in changes from 2027, including a reported increase in rental income tax for individuals. Confirm the rate that applies to your tax year with your own Dominican attorney before you file or price a deal.

Many buyers end up here for one reason. CONFOTUR exemptions only go to the party that buys directly from the classified project. Ley 158-01, Art. 4, Párrafo IV, as amended by Ley 195-13 expressly excludes any later transfer to a third-party acquirer. If you buy a CONFOTUR unit on resale, you are a non-CONFOTUR owner for tax purposes. Budget the full 3% transfer tax at purchase (also subject to the Ley 30-26 phase-out from 2027) and plan to pay income tax on rent from the first booking.

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02Individual or Company: Which Rate Applies to You?

The scale depends on who owns the property under the Certificado de Título. A personal name means the progressive scale. An SRL means the corporate rate, which is fixed at 27% by Ley 253-12, Art. 11, amending Código Tributario Art. 297.

The individual brackets for 2026 come from DGII's annual adjustment resolution, DDG-AR1-2026-00001:

The scale is set in pesos, so the dollar equivalents shift with the exchange rate. On typical net rental income of $10,000–$20,000, the effective rate for an individual usually lands somewhere around 5–15%. That is well below the headline 25%.

The company route looks simpler: 27% of net income, with no brackets. It brings other things with it. An SRL needs monthly and annual filings, and in practice an accountant, which costs roughly $1,500–$3,000 a year (an estimate, not a measured figure). Companies also fall under the 1% asset tax, which works as a minimum tax creditable against income tax, so you pay whichever is higher rather than both. And because IPI applies to individuals, a company-held unit is outside IPI for now. That last point reflects current practice, not a settled rule.

03Does ITBIS Apply to Airbnb Stays in the Dominican Republic?

Possibly. ITBIS is the 18% Dominican value-added tax. Long-term residential leases are exempt, because the Tax Code exempts housing rentals. Short stays are less clear. A two-night booking with linens and cleaning looks less like a home rental and more like tourist lodging, and tourist lodging is a taxable service.

The exemption was written for people renting a home to live in. The closer your unit operates to a hotel room (nightly turnover, housekeeping, check-in service), the weaker the case for treating it as a housing rental. DGII has moved toward treating platform-based short stays as taxable, but it hasn't published a single clear rule for small private owners that we can point you to. Treat ITBIS as a real liability to price in, not a theoretical one.

The cost depends on who carries it:

• If you add ITBIS on top of your rate, the guest pays it and you pass it to DGII. That requires an RNC (taxpayer number), monthly IT-1 returns and proper invoicing with comprobantes fiscales (NCF).
• If you absorb it inside an unchanged nightly rate, 18% ITBIS takes 18/118 of the price, about 15.3% of gross. On $19,000 of bookings, that is roughly $2,900.

Your choice of rental strategy changes your tax position as well as your income. A 12-month lease avoids the ITBIS question entirely. Our analysis of long-term rental vs Airbnb break-even occupancy in Las Terrenas shows how thin the gap already is before tax. ITBIS on short stays narrows it further.

04When Does Withholding Apply to Rental Income?

Withholding (retención) applies when the person paying your rent is a withholding agent, typically a Dominican company. It rarely applies to individual Airbnb guests. If a local business rents your villa for staff housing or a corporate retreat, it will generally withhold 10% of the rent paid to an individual owner and remit it to DGII.

That withholding is a prepayment, not an additional tax. You claim it as a credit on your annual IR-1 return. If your total liability is lower, for example because your income sits mostly inside the exempt bracket, the excess becomes a credit or refund claim. Recovering it takes paperwork, so keep every withholding certificate the payer issues.

Non-residents face a stricter regime. Under DGII practice, Dominican-source payments to non-residents are generally subject to withholding at a flat rate aligned with the 27% corporate rate. That leads to the next question.

05Does Being a Non-Resident Change Your Tax Bill?

It can, and the effect may be large. This is the least-discussed variable in Dominican rental tax. The progressive scale and its RD$416,220 exempt bracket are built for resident taxpayers. A foreign owner who spends a few weeks a year in the country and files no Dominican return may be treated differently, with flat withholding rather than bracketed tax.

Tax residency is separate from migratory residency. Holding a residence card from Dirección General de Migración doesn't automatically make you a tax resident, and lacking one doesn't make you a non-resident. Tax residency generally depends on days of presence in a fiscal year. How it applies to your situation is a question for your attorney or accountant, not for a blog post.

In practice, most foreign owners who rent actively register for an RNC and file an annual IR-1 declaring the rental income. That puts them on the scale above. Whether that treatment holds for your profile is the first thing to confirm before you rely on the exempt bracket in your numbers.

Disclaimer: This article is general information about Dominican tax rules in force for fiscal year 2026. It is not legal or tax advice. Ley 30-26 is phasing in changes from 2027 that Evalúa's counsel has not yet confirmed for foreign owners. Have a Dominican attorney or contador público autorizado review your structure before filing.

06What Does the Tax Bill Look Like on a $250,000 Condo?

On a $250,000 two-bedroom in Las Terrenas grossing $19,000 a year, 2026 income tax for an individual owner ranges from $0 to about $1,330, depending on which expenses DGII accepts. ITBIS, if you absorb it, could cost more than the income tax. The gross figure sits inside the Evalúa market model's average of roughly $18,000–$20,000 for a standard 2BR (May 2026).

Step 1: from gross bookings to pre-tax profit

Cleaning fees aren't deducted because guests pay them. HOA, insurance and utilities figures are indicative estimates, not measured medians.

Step 2: income tax under different assumptions (2026 rates)

The gap between the first two rows comes down to deductibility. Expenses only count against Dominican income if they are documented with valid NCF receipts. An HOA that issues no fiscal invoices, or a handyman paid in cash, gives you nothing to deduct. Ask your administrador and your property manager up front whether they invoice with NCF.

If ITBIS applies and you absorb it, subtract about $2,900 more from any row. The worst case is the 20% row with absorbed ITBIS, which leaves around $220 a year of real profit on a $250,000 asset. That number is why ITBIS planning matters.

Don't extend these figures past 2026. Rental tax for individuals is reported to rise under Ley 30-26, and Evalúa doesn't model post-2026 rates until counsel has confirmed them. Plug your own figures into the Rental Income Calculator to see where your unit falls.

07What Should Foreign Owners Watch Out For?

Most problems come from what owners don't file, not from the rates. These are the ones we see most often, each with a trigger you can check:

• No RNC, no filings. If you have taken bookings for a full fiscal year without an RNC or IR-1, you have a growing exposure. Annual individual returns are generally due by the end of March for the prior calendar year. Missing that date adds surcharges and interest.
• The resale CONFOTUR assumption. If your purchase contract or the agent's pro forma shows "0% rental tax" on a resale unit, the projection is wrong. The first-acquirer rule cited above settles it.
• ITBIS left out of the price. If your nightly rate was set without accounting for 18%, work out whether you are absorbing 15.3% of gross before DGII decides the question for you.
• Missing withholding certificates. If a corporate tenant withheld 10% and never gave you the certificate, you can't claim the credit. Ask for it each month.
• Exit consequences. Rental years you didn't declare become a problem at sale, when DGII reviews your filings before issuing clearances. Our guide to selling DR property as a foreigner covers that step.
• Home-country reporting. US, Canadian and most European owners must also declare the rent at home. Dominican tax paid is usually creditable against home tax, but only if you can document it, which is one more reason to file in the DR.

The trigger to watch: when DGII publishes implementing guidance for Ley 30-26 or a specific rule on platform-based short stays, every number in this article needs re-checking. Until then, the 2026 framework above is the one to plan around.

08Key Terms Glossary

ISR

Impuesto Sobre la Renta, the Dominican income tax that applies to rental profits.

ITBIS

The 18% Dominican value-added tax on goods and taxable services, potentially including short-stay lodging.

RNC

Registro Nacional de Contribuyentes, the taxpayer number you need before you can file or invoice.

IR-1

The annual income tax return for individual taxpayers.

NCF

Número de Comprobante Fiscal, the fiscal receipt number an expense invoice must carry to be deductible.

Retención

Tax withheld at source by the payer and credited against your annual liability.

Persona jurídica

A legal entity such as an SRL, taxed at the flat 27% corporate rate.

IPI

The annual 1% property tax on an individual's combined Dominican real estate above roughly US$182,000.

09Frequently Asked Questions

Do foreigners pay tax on Airbnb income in the Dominican Republic?

Yes. Rental income from Dominican property is Dominican-source income and taxable there regardless of the owner's nationality or where payouts are deposited. Only owners who bought directly from a CONFOTUR-classified project are exempt, for 15 years from the project's completion.

What is the rental income tax rate in the DR without CONFOTUR?

For 2026, individuals pay 0% up to RD$416,220 of net taxable income, then 15%, 20% and 25% on higher slices. Companies pay a flat 27%. Ley 30-26 phases in changes from 2027, so confirm the current rate with your attorney.

Is ITBIS charged on short-term rentals in the Dominican Republic?

Long-term residential leases are exempt from ITBIS. Short stays that operate like tourist lodging are increasingly treated as a taxable service at 18%. Get a written opinion from your accountant before you set your nightly rates.

Does Airbnb withhold Dominican tax for me?

No Dominican income tax is withheld on standard guest bookings, so declaring and paying is your responsibility. Withholding mainly arises when a Dominican company pays your rent directly. That amount is a credit on your annual return, not a final tax.

Is it cheaper to hold a rental property in an SRL?

For one condo with modest net income, usually not. The individual exempt bracket and lower brackets beat a flat 27%, and an SRL adds accounting costs. Companies make more sense for portfolios or estate planning, so model both before deciding.

10The Short Version

Three points matter most. A non-CONFOTUR owner owes income tax on rent, at 0–25% personally or 27% through a company for 2026. Whether expenses carry NCF receipts can make the difference between a $0 bill and a four-figure one. And ITBIS on short stays is the cost most likely to have been left out of your projections.

Before you commit to a unit, run the full picture through Evalúa's Property Analyzer so rental assumptions, carrying costs and tax all sit in one place. Our legal and tax guides track the Ley 30-26 rollout as DGII publishes guidance.