Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

April 26, 2021

Dominican Republic issues amendments to transfer pricing regulations

The amendments modify current transfer pricing regulations and require taxpayers to file the country-by-country report and notification, master file and local file.

On 21 April 2021, the Dominican Republic’s Tax Administration (DGII) issued Decree 256-21 (the Decree), which modifies Articles 5, 7, 10 and 18 of the transfer pricing regulations established by Decree No. 78-14 of 14 March 2014. The Decree is effective 1 January 2021.


In October 2018, the Dominican Republic joined the Organisation for Economic Co-operation and Development’s Inclusive Framework of the Base Erosion and Profit Shifting (BEPS) project. As a result, the Dominican Republic committed to implementing the BEPS minimum standards in matters of tax transparency, one of them being the implementation of Action 13 (Transfer Pricing Documentation).

Main provisions

Article 5

The amendments to Article 5 establish: (i) provisions related to the comparability analysis; (ii) the economically relevant characteristics in the delineation of transactions with related parties; and (iii) steps to be followed in the analysis of risks borne by the parties. When the economically relevant characteristics differ from the written contractual terms and the taxpayer’s other documentation, the amendments require the delineation of the transaction to be carried out based on the parties’ conduct.

Article 7

The amendments to Article 7 modify the provisions of the profit split method by adding two approaches—a contribution analysis and a residual analysis. These approaches are also recognized in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations.

Article 10

The amendments to Article 10 define when an international intermediary exists.

Article 18

The amendments to Article 18 adopt the three levels of documentation provided by BEPS Action 13:

Country-by-Country (CbC) report. Taxpayers must file the CbC report if they: (i) are part of a multinational enterprise (MNE) group; (ii) earned, in the immediately preceding tax year, consolidated revenue for accounting purposes equal to or greater than the threshold amount to be defined in a general rule (not yet issued); (iii) are the ultimate parent entity (UPE); and (iv) reside in the Dominican Republic for tax purposes. They must file the CbC report from tax year 2022 in 2023 and thereafter. Additionally, any entity that is a member of an MNE group that is resident for tax purposes in the Dominican Republic may file this report in the Dominican Republic and make the corresponding notifications under the conditions established by the general rule, provided that no CbC report regulations exist in the UPE’s country of residence.

Master file. Taxpayers that are considered related parties under item 1, Article 2 of Decree No. 78-14 must submit the master file in electronic format within 180 days of the transfer pricing information return filing date. The master file must contain information on the organizational structure, business, intangible assets, financial activities and existing advanced pricing agreements, among other things.

Local file. The local file must contain specific information on the taxpayer and its intercompany transactions, the amounts of such transactions, functional and economic analyses conducted in the determination of its transfer prices and financial information, among other things. The local file must be submitted in electronic format within 180 days of the filing date of the transfer pricing information return.

Taxpayers excluded from filing local and master files

The following taxpayers are excluded from the obligation to prepare the master file and local file:·  

  • Taxpayers that have transactions with related parties that do not exceed, as a whole, RD$12,193,981.70 (approximately US$214k), adjusted annually for inflation, and do not carry out transactions with other entities resident in tax havens or preferential tax regimes
  • Taxpayers that conduct intercompany transactions with resident related parties, provided that such intercompany transactions do not result in a tax deferral or overall reduction of tax revenues

Due dates

The DGII is expected to issue a general rule that would establish the due dates for submitting the CbC report, the threshold for the CbC report filing requirement, and the cases in which entities would have to make the corresponding notifications, among other things. 

Taxpayers must file the transfer pricing information return (or DIOR) annually, with the corporate tax return (IR-2). Before these modifications, taxpayers had to file the DIOR within 180 days of the tax year’s closing date. Under the modifications, the due date for the return would be within 120 days after the tax year-end, applicable from tax year 2022 and onwards.

The modifications also require the master file and local file to be submitted in digital format within 180 days of the filing of the DIOR.


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 Abogados, Latin America Business Center, Madrid

Ernst & Young LLP (United Kingdom), Latin American Business Center, London

Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific


The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.


Copyright © 2023, Ernst & Young LLP.


All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.


Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.


"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.


Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct