Engaging a contractor in the Dominican Republic runs on the RNC and the electronic invoice. An individual registers with the tax authority (DGII), gets a tax number, and issues an e-CF for each payment. Income tax is the contractor’s own, filed on form IR-1; a foreign payer pays the invoice and we found no rule that makes it withhold. The legal risk is classification, because the Labor Code presumes employment in every personal work relationship until proven otherwise. This guide covers the invoice and ITBIS question, the contractor’s tax, reclassification, the contract and the payer’s paperwork. The payment side is on our Dominican Republic payouts page. It is general information, not legal advice.
RNC and the e-CF
Individual. The contractor registers with the DGII for an RNC with form RC-01 and a copy of the cédula; registration is free (DGII, checked 2026-10-26). A 2021 notice says a bare registration does not let the person request fiscal receipt numbers (DGII notice 23-21, checked 2026-10-26), so ask for a sample invoice, not only the RNC.
E-invoicing. Small, micro and unclassified taxpayers have until 15 November 2026 to implement it (Siempre al Día, checked 2026-10-26). Company. A contractor working through a company issues the same documents under the company’s RNC.
ITBIS on the invoice
The general ITBIS rate is 18% (DGII, checked 2026-10-26). Services used and consumed exclusively abroad by a non-resident who pays from foreign income, with no effect on Dominican income or expenses, are exempt (DGII, Decree 603-10, checked 2026-10-26). In a 2021 ruling the DGII refused the exemption to a firm that could not show exclusive consumption abroad, and held that consumption of a service occurs when it is delivered (DGII consulta, checked 2026-10-26). That ruling concerned legal advice; we did not find one for software work. State in the contract whether the fee is net or gross of ITBIS.
The contractor’s tax
Income tax. For 2026 an individual pays nothing on the first RD$416,220 a year, then 15% to RD$624,329, RD$31,216 plus 20% to RD$867,123, and RD$79,776 plus 25% above (DGII guide no. 9, checked 2026-10-26). From fiscal year 2027, Law 30-26 raises the exemption to RD$480,000 and adds a 27% rate above RD$4,800,000 (DGII notice 10-26, checked 2026-10-26). The scale is indexed annually to inflation. The client pays none of it, but a contractor quoting a net rate must cover it.
Reclassification risk
The Labor Code defines an employment contract as a person’s commitment to provide a personal service to another for pay, under the dependence and immediate or delegated direction of the latter, and presumes one in every personal work relationship until proven otherwise (art. 15) (PHLaw summary, checked 2026-10-26). The label does not decide it. The employer can rebut the presumption by proving the relationship was of another nature.
A single client, fixed hours, a set monthly fee and your instructions are the facts a claimant would use (contractor misclassification). Dismissal of an employee costs 21 days of salary per year of service after one to five years and 23 days after five, with 28 days’ notice after a year, a Christmas bonus of one-twelfth of the year’s salary and 14 working days of vacation (PHLaw summary, checked 2026-10-26). If the role is a job, hire through an EOR.
What to put in the contract
- A written services agreement scoped to deliverables, with the fee, currency, receiving account, whether ITBIS is included and who bears transfer charges.
- An e-CF for every payment, matched to the payment reference.
- IP assignment in writing. We did not confirm which article of Law 65-00 governs commissioned software; assign the rights explicitly and ask local counsel about formalities.
- Independence markers: the contractor’s own equipment and schedule, the right to work for other clients, and a fee tied to deliverables.
Taxes and paperwork
The contractor’s side. Get an RNC and the right to invoice, issue an e-CF per payment, and settle income tax on form IR-1.
The client’s side. Pay against the invoice. US payers collect a W-8BEN from an individual and file no 1099: the Dominican Republic is not on the IRS list of treaty countries (irs.gov, checked 2026-10-26), and pay for work done there is foreign-source income (irs.gov, checked 2026-10-26).
How to pay contractors in the Dominican Republic
Wise credits pesos to a Dominican bank account from the account details, with its fee quoted before you send (wise.com, checked 2026-10-26). A SWIFT wire is the alternative, and some platforms pay USD or DOP directly. Rails, costs and platforms are compared on our Dominican Republic payouts page.
Contractor of Record in the Dominican Republic
A Contractor of Record is the contracting party for the contractor and reduces reclassification risk; it does not remove it. The work still has to look independent, and the COR also collects the invoice and keeps contracts consistent across a team. Read the liability clause in the contract rather than the product name. Where the role is a job, with your hours, your tools and core work, hire through an EOR instead. Compare providers in our COR rating.