DOMINICAN REPUBLIC: AUTOMATIC DECLARATION OF STATUTE OF LIMITATIONS – ABBREVIATED TAX AUDIT PROCEDURE – PAYMENT PLANS

DOMINICAN REPUBLIC: AUTOMATIC DECLARATION OF STATUTE OF LIMITATIONS – ABBREVIATED TAX AUDIT PROCEDURE – PAYMENT PLANS.

Yesterday, Law No. 51-23, passed by the Congress of the Dominican Republic on August 10^th, 2023, was made available. This law establishes (i) an automatic declaration of the statute of limitations period, (ii) an abbreviated audit procedure, and (iii) a tax payment plan.

1. Automatic Declaration of the Statute of Limitation Period on Tax Debts

Scope: Individual and corporate taxpayers that hold tax debts transparent in the taxpayers’ account related to periods prior to 2015, FY 2016 – 2021 reporting tax debts – undergoing tax audits or not. Outstanding debts of taxpayers appointed as collection or withholding agents are excluded from this automatic prescription declaration.

Taxes covered: (i) Income Tax (“ISR”): (ii) Industrialized Goods and Services Transactions Tax (“ITBIS”); (iii) Selective Consumption Tax (“ISC”); (iv) Asset Tax (“ISA”); (v) Real Estate Asset Tax (“IPI”); (vi) Free-Zone Tax; and (vii) Lottery, Bets, and Sport Prices Tax.

Requirements:

1. Be up to date with their tax returns filings as of FY 2016.
2. Not be subject to a tax crime procedure.
3. Not be undergoing tax audits or tax investigations.

B. Temporary Abbreviated Audit Procedure

Taxpayers who are undergoing tax audits related to ISR or ITBIS by the time this Law is effective are entitled to request the application of this abbreviated procedure through the virtual offices) of the Tax Authorities (“DGII”), that in turn shall accept or reject said request within 30 calendar days. If rejected, said decision may be subject to appeal. If accepted, the DGII shall determine this abbreviated procedure duty/fee, which must be paid within 30 calendar days.

C. FY 2016 – 2021 Tax Outstanding Amounts Payment Plan

1)Outstanding amounts arising from assessments made by the Tax Authorities undergoing appeal procedures by the time this Law becomes effective shall be able to be paid in 1 time, equal to 70% of the assessed taxes, with no interest on arrears or compensatory interest. This payment must be made within 3 business days of the acceptance date.

2) Outstanding amounts arising from unpaid tax returns 100% of the taxes and up to an amount equal to 6 months of compensatory interest without considering interest on arrears. However, if the taxpayer adheres to payment in installments, applicable interests must also be paid. This payment must be made within 120 calendar days or in up to 4 monthly, equal, and consecutive installments.

The Solid Waste Contributions and the abbreviated procedure from section B are not included in these payment plans. In the case of the Income Tax Advance, this payment plan can only eliminate interest on arrears and compensatory interest. These Payment Plan Requests shall be filed by December 20^th, 2023, through the virtual offices of the DGII or in person, and the DGII must accept or reject said request within 45 business days.