Emerging Markets Rates and Currencies Handbook

Documentation Requirements Spot transactions: KYC in place is required. Forward transactions: a master local agreement, a LEI ID and a confirmation document signed by the client and the bank after each deal are required. Trade Flows No local law documentation requirements for FX transactions. Capital Flow and FDI No local law documentation requirements for FX transactions. Citibank Dominican Republic Ave. Winston Churchill esq. A. J. Aybar Torre Citi en Plaza Acrópolis, piso 26 Santo Domingo, República Dominicana FX Sales Contact: +1809-473-2422 /2317 fxsales.do@citi.com Tax Summary – Dominican Republic Dominican Republic Country Tax Deductibility and Considerations Inter-Co Debt Offshore Bank Loans Offshore Local Borrowing Derivatives Equities W/H Tax • 10% WHT • No WHT • If interest is paid to a resident individual, 10% WHT applies. • Interest paid by financial institutions to legal persons are subject to a 1% WHT. • N/A • 10%WHT Tax on dividends Deductibility of interests • Proportionality rule: the proportion of interest deductible by a domiciled or resident debtor for debts granted by resident individuals or foreign individuals, companies or entities, should be the result of dividing the WHT rate applicable to interest payments to said type of creditors (i.e., 10%) by the Corporate Income Tax rate (i.e., 27%) in DR. If the interest paid by a resident or domiciled debtor constitutes taxable income for a non-resident or non- domiciled creditor in its jurisdiction of domicile or residency, and if the foreign creditor’s tax rate for said income is equal or greater than the 27% CIT rate applicable in the DR, the local resident or domiciled debtor may claim a deduction for 100% of the interest expense. Conversely, if the foreign creditor’s Income Tax rate for the interest income is lower than 27%, then the local domiciled or resident debtor can only deduct a proportion of the interest equal to the foreign creditor’s Income Tax rate divided by local CIT. • Thin cap rule: Debt-to-equity ratio of 3:1. • N/A • N/A Deductibility of (FX) Losses • FX fiscal losses are deductible for CIT purposes if it complies with domestic conditions for deductibility. • N/A • N/A Other Taxes/Duties • 0.15% on funds transferred from local bank for interest payments. • 0.15% on funds transferred • Not charged on disbursement but is charged on interest payments • N/A • N/A Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources 211