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Relief Measures for Tax Compliance in the Face of the Economic Impact of COVID-19 in the Dominican Republic

Dominican Republic Tax Office (DGII) COVID-19 Tax Relief Update

  • Taxpayers may pay their February VAT (ITBIS) in up to 4 installments starting from the new 3/30/2020 extended deadline.
  • Installments of all tax debt payment agreements in force as of March 19, 2020, are reduced by 50%. Deadlines for these payments will be extended to double their term and taxpayers with overdue payments will benefit from other relief measures, without incurring in further penalties.
  • An extension is granted until 5/29/2020 to all taxpayers with Dec. 31st fiscal year closings, for the filing and payment of their Income Tax Returns.
  • DGII will temporarily cease to collect on payments derived from Advance Price Agreements (“APA”) in force with the hospitality industry.
  • An extension is granted until 4/30/2020 for the filing of the Related-Party Transfer Pricing Affidavit (DIOR) for taxpayers with fiscal year closing date of September 30th.

Tax Office (DGII) Operational Notices

Starting on Tuesday, March 24, 2020:

  • Tax Offices will be temporarily closed to the public. These will include Local Administrations, Service Centers, Tax Collecting Offices, Real Estate Operations and the Motor Vehicle Department.
  • All VAT and excise taxes exemption requests may be processed online through the Virtual Office. 

Income Tax Advance Exemptions and Deferral of both Payment Agreements and the entering into force of Law 46-20

  • Taxpayers, including corporate entities and sole proprietorship, with monthly obligation to pay Income Tax advances are exempt from payment of said advance for the March 2020 fiscal period. This provision does not apply for large taxpayers, except for those whose business have been ordered to shut down during the State of Emergency.
  • A three-month extension is granted for taxpayers with payment agreements in force as of 3/19/2020, applicable to installments with closing dates in April, May and June 2020.
  • Law 46-20 on Voluntary Wealth Disclosure is deferred until further notice. This statute establishes a special and transitory tax amnesty for taxpayers to voluntarily disclose or reassess all their movable and real estate properties located in the country or abroad.

Updates From Guzmán Ariza on Measures Taken by the Central Bank to Mitigate COVID-19 Pandemic Impact on the Dominican Republic Economy and Financial Sector

  • Reduce the Monetary Policy Rate by 100 points from 4.50% to 3.50% annually.
  • Authorize financial institutions to freeze debtors qualifications and provisions at their current level.
  • Decrease the interest rate of permanent liquidity adjustment facility (1-day repos) by 150 basis points, from 6 to 4.5%.
  • Reduce the interest rate on short-term paid deposits at the Central Bank to 2.50% per year.
  • Authorize credit restructurings entailing changes in payment terms, interest rate, time limits and fees.
  • Lighten coverage requirements of legal reserve in foreign currency.
  • Injecting liquidity into foreign currency for a sum of money up to US$ 300 million.
  • Ease the reserve coverage requirements for a sum of money up to RD$22,321 million.