Dominican Republic: Proposal to revise tax procedural and administrative rules

The Dominican tax authority (DGII) last week announced a draft of a proposal to modify and update certain tax procedural and administrative provisions under Title I of the Dominican tax law.

The draft is to be subject to a public consultation before being submitted to the Congress.

Certain changes set forth by the draft proposal include the following:

• The draft proposes that surcharges imposed for delayed payment of taxes would be reduced to a rate of 3% per month or fraction thereof and would not in any event be greater than the amount of the original underlying tax due.
• A “taxpayer’s rights plan” would serve as a framework for compliance with certain duties and tax obligations as well as the “National Office for the Defense of Taxpayer’s Rights.”
• An “electronic administration” regime would aim to optimize the reception and remittance of notifications through the DGII’s virtual portal. This would include updates regarding the DGII’s virtual portal, enabling its mailbox to serve as a means of receiving requests from taxpayers (and not exclusively used to notify taxpayers of certain legal proceedings).
• Tax refund processes would be modified and improved so that:
  • Compensations would be conducted automatically.
  • Taxes paid in excess of amounts due could be offset against any type of tax (including advanced corporate income tax payments and penalties of any nature).
  • Compensatory interest would be available for taxpayers when there are unreasonable delays attributable to the DGII.
• The proposal would establish a new statute of limitation for the collection of tax debts (in addition to the existing statute of limitation establishing the time period to perform a legal action in order to pursue the collection of taxes).
• Rules regarding technical rulings or consultations issued by the DGII would be modified so as to apply the principles of publicity and equality; thus, all technical rulings and consultations would have to be published by the DGII, making these rulings binding to all taxpayers operating under the same conditions as the taxpayer making the request.
• Rules regarding the burden of proof or the rules of evidence in matters before the courts would be improved, and would include a shifting of the burden of the proof to the DGII when the evidence is in possession of the tax authority.
• Direct or indirect shareholders with participations exceeding 30% ownership of a domestic entity would be jointly liable for any noncompliance regarding the domestic entity’s tax obligations. In addition, a there would be a procedure whereby the DGII would from the outset notify such shareholders of any procedures to enforce any outstanding tax obligations, hence making them liable for such potential payment.
• Administrative representation would be allowed and admitted by any legally available means.
• There would be revisions regarding the rules for assumptions used to determine the presumed base for the determination of a tax obligation.
• There would be provisions regarding mutual assistance and international collaboration.

Read a March 2022 report [PDF 922 KB] prepared by the KPMG member firm in the Dominican Republic