Transfer pricing in the Dominican Republic

Transfer pricing in the Dominican Republic at a glance

Regulation Type National regulations
Are there specific transfer pricing regulations? Yes
Submission deadline Contemporaneously
Submission deadline upon request Directly
Annual update required Yes
Official language requirements Spanish
Potential impact of penalties 10% surcharges

 

The Dominican Republic tax law

Rules for transfer pricing in the Dominican Republic are based upon:

  • Dominican Tax Code Laws 11-92 and 253-12

OECD

Generally the OECD Transfer Pricing Guidelines are followed in the Dominican Republic. However, when the OECD guidelines contradict with the national regulations, the national regulations prefer.

Methods

Accepted methods

Accepted methods are:

  • The comparable uncontrolled price method
  • The resale price method
  • The cost plus method
  • The profit split method
  • The transactional net margin method

Priority of methods

Rules for transfer pricing in the Dominican Republic prescribe that the most appropriate method should be used. However, the traditional methods are preferred over the transactional methods.

Documentation requirements

Information that should be included in the documentation:

  • Relevant market conditions
  • A detailed description of the nature of the transactions
  • Information on the taxpayer that includes financials and detailed analysis of functions, risks and assets
  • Comparability analysis
  • Transfer pricing method(s) employed

Language

Rules for transfer pricing in the Dominican Republic prescribe that all documentation should be submitted in Spanish.

Requirements to prepare documentation annually

Rules for transfer pricing in the Dominican Republic prescribe that documentation should be updated annually.

Submission deadline upon request by tax authorities

Upon request, a taxpayer is obliged to submit it’s documentation directly.

Advance Pricing Agreements

General

In the Dominican Republic it is possible to obtain an Advance Pricing Agreement (APA).

Terms

An APA in the Dominican Republic can be concluded for a period of three years or longer.

Penalties

Rules for transfer pricing in the Dominican Republic provides for the imposition of surcharges (10 percent for the first month or fraction thereof, and 4 percent thereafter), and interest (1.73 percent for each month or fraction thereof) counting from the date when the Corporate Income tax was filed. However, in the case of a voluntary returned amendment, it is possible to obtain a 40 percent discount on the surcharges.

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