Generally, the tax year is the calendar year. Companies are, however, allowed to adopt a different tax year ending on 31 March or 30 June, or 30 September. Once the year-end is selected, any change should be authorized by the tax authorities.
Companies are required to file tax returns within 120 days after the year-end. Tax authorities may allow extensions of up to 2 months, upon request.
Taxpayers covered under the simplified tax regime (RST) (see Sec. 8.1.1.) are required to submit their tax returns by the last business day of February of the following year.
Companies having turnover exceeding DOP 15,216,507 in the year 2020 (previously DOP 14,679,773 for the year 2019) are required to submit sworn financial statements with the annual tax return.
Taxpayers are required to make monthly prepayments of tax. For taxpayers having an effective tax rate (ETR) in the preceding tax year lower or equal to 1.5%, each prepayment equals the amount resulting from applying the 1.5% rate to the gross income reported in the preceding fiscal year.
Taxpayers with an ETR higher than 1.5% is required to make monthly prepayments of 1/12 of the income tax paid in the preceding tax year. The ETR is determined by dividing the income tax paid in the preceding tax year by the gross income of the same period. The balance of any tax due, i.e., the final tax, must be paid not later than the due date for filing the return.
Taxpayers covered under the simplified tax regime (RST) (see Sec. 8.1.1.) are required to make tax payments in four instalments in March, June, September, and December.
‘Asset Tax’ or ‘Alternative Minimum Tax’ (see Sec. 8.1.1.) is required to be paid in 2 instalments. The first instalment is due along with the due date for the payment of final income tax, i.e., within 120 days after the year-end, and the second instalment is due within 6 months from the expiration of the first instalment.
The Dominican Republic adopted various measures in response to the COVID-19 pandemic. The measures include:
- An exemption from payment of advance income tax for the months of May and June 2021 for micro and small businesses (i.e., income not exceeding DOP 61,553,187.51 in the fiscal year 2020). Taxpayers not meeting the threshold may also request for a total or partial exemption if they have experienced a significant reduction of income during the course of the year 2021 as compared to the year 2019. Specified taxpayers operating in the tourism sector are also exempt from the payment of advance tax for May and June 2021, regardless of the income condition;
- In respect of the tax on company assets (i.e., ‘Asset Tax’ or ‘Alternative Minimum Tax’):
- an exemption is provided to taxpayers qualifying as micro and small businesses with tax years ending on 31 March, 30 June, and 30 September 2020 (with certain exclusions) from payment of the first instalment of asset tax. The exemption is also available to taxpayers in the hotel sector. For micro or small taxpayers not qualifying for the exemption, an automatic payment agreement is provided for the first instalment payment, which will be paid in three equal instalments; and
- for taxpayers with the first instalment of asset tax due on 28 January 2021, the payment can be made in two equal and consecutive monthly payments starting on 28 January 2021;
- In respect of tax payments, taxpayers are provided the following options for tax settlement:
- option to close the 2017, 2018, and 2019 tax years from any further audit through the payment of a 3.5% special tax (plus a 2% special revaluation tax) on the average net operating income declared for tax purposes for the three tax years;
- settlement facility for tax determinations by the tax authority that are under objection or appeal at the time the law was enacted, which allows the tax to be settled by making a one-time payment of 70% of the tax determined without interest or penalties; and
- settlement facility for tax debts determined through ordinary declarations or voluntary corrections, which allows the tax to be settled by paying 100% of the tax due over a maximum period of 12 months with interest but no penalties.
Tax returns must be filed electronically through portal https://www.dgii.gov.do/ofv/login.aspx.