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February 24, 2020
2020-5265

Dominican Republicís Executive Branch enacts voluntary disclosure program and tax amnesty

On 19 February 2020, the Dominican Republic enacted Law No. 46-20 of Transparency and Asset Revaluation (the Law), which establishes a voluntary disclosure program for taxpayers who did not previously report certain assets to voluntarily report those assets or revaluate assets previously reported. The Law also establishes a tax amnesty program for all existing tax liabilities, regardless of the type of tax, their origin or whether the liabilities are subject to administrative or judicial appeals.

Voluntary disclosure program

According to the Law, the assets that may be reported or revaluated include cash, financial instruments and securities, movable and immovable property, and inventory. Taxpayers that participate in the voluntary disclosure program and report or revaluate assets will be subject to a reduced tax rate of 2%, regardless of the type of tax applicable (e.g., asset tax, capital gains tax).

Tax amnesty

Taxpayers that participate in the tax amnesty will be allowed to pay the amount of the outstanding tax liability and only one year of interest. They will not have to pay any other interest or surcharges. They may also split the payment, but the first payment must be at least 40% of the total amount due.

Applicability

The voluntary disclosure program and tax amnesty apply for 90 days beginning 20 February 2020. To participate in the voluntary disclosure program or tax amnesty, taxpayers must submit a request with the National Office of Internal Revenue within 90 days of the enactment date. Once the National Office of Internal Revenue authorizes the taxpayer’s participation in the voluntary disclosure program or tax amnesty, the taxpayer must pay the tax within 180 days of receiving the authorization from the National Office of Internal Revenue.

For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.R.L., Santo Domingo
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

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