Tax relief in response to coronavirus (COVID-19)
- A deadline extension has been granted regarding the filing and payment of tax obligations related to Corporate Income Tax (“CIT”), Individual Income Tax (“IIT”), as well the Simplified Tax Regime (“RST”), Asset Tax and Value Added Tax (“VAT”), as follows:
- Second installment of the IIT advance with non-commercial and industrial activities and third installment for RST based on income for entities (RS2) and purchases (RS3) (now October 30, 2020);
- Second installment of IIT for individuals and Agricultural businesses operating under the RST (now December 31, 2020).
- Allowing taxpayers that, after having filed their CIT/IIT returns, are required to pay additional CIT/IIT before the DGII, may settle the remaining CIT/IIT through deferred payment arrangements of up to 4 equal and consecutive installments; .
- Facilitate tax compliance for taxpayers with outstanding tax obligations in connection with payment arrangements, free of penalties.
- Ceasing temporarily to apply the corresponding rate from Advanced Pricing Agreements (APAs) for the hospitality industry.
- Enabling the OFV to request the issuance of a vehicle’s first license plate.
- Digitalization, via the Virtual Office (OFV), of the exemption requests related to VAT and Excise Tax (ISC), expressly provided for under applicable law, regulations and congressionally approved contracts.
- Simplification of the procedures for the Trustees that promote low-cost housing.
- Elimination of the surcharge for late import declaration, by request submitted to the General Agency for Customs (DGA).
- The DGA will not take into consideration the days of quarantine for ruling the abandonment of merchandise.
- Enabling digital reception of the following requests: (i) tax exemption requests from Law No. 253-12; (ii) tax exemption requests according to provision No. 7204; and (iii) World Trade Organization Quota Authorizations.
- Exemption from the payment of CIT/IT advances for the fiscal period of March, April, May June, 2020. The exemption shall not apply to large national taxpayers, not including those with legal barrier to operate during the state of emergency (e.g. airports, travel agencies, shopping malls, hotels, tour operators). Taxpayers who are subject to the payment of CIT/IT advances but due to particular circumstances cannot make the corresponding payment, can request total or partial exemption from this obligation.
Tax relief in response to coronavirus (COVID-19) : Tourism Recovery Plan and complementary budget bill
The Dominican Government, following the emergency declared by the Executive Branch (hereinafter, the “EB”), has implemented certain tax relief measures related to the Tourism Recovery Plan. In addition, the EB introduced a Complementary Budget Bill to the Dominican Congress; which was subsequently passed, and therefore a new series of regulations were set forth as to provide relief from the economic effects of the coronavirus (COVID-19) pandemic.
Detailed below are the most relevant measures recently implemented by the EB:
Measures taken regarding the Tourism Recovery Plan:
- As of September 1st, 2020, thirty-five percent (35%) reduction would apply to the Advance Price Agreements (hereinafter, “APA") rate, concerning the September-November period of 2020.
- An exemption on the advanced Corporate Income Tax (“CIT”) payments has been granted for the tourism sector, for a six (6) month period.
- An Asset Tax (“AT”) exemption has been granted for the tourism sector, until June 2021.
- The term of the tourism projects classified by the Tourism Development Council (“CONFOTUR”, for its Spanish acronym) has been extended for an additional two (2) years.
Provisions set forth by the Complementary Budget Bill, No. 222-20:
The Asset Transparency and Revaluation Law, No. 46-20, has been amended as to provide the following:
- A tax amnesty program has been set forth, which would allow taxpayers to settle CIT and Value-Added Tax (“VAT”) liabilities, concerning FYs 2017, 2018 and 2019, by paying a 3.5% tax on the average of the net operating income declared during these years.
- Tax liabilities currently under appeal, either before the Dominican Tax Authority (“DGII”) or a Tax Court, may be settled by a single payment of 70% of the corresponding tax liability, thus eliminating the surcharges and interest fees
- One hundred percent (100%) of surcharges will be eliminated from the tax liabilities arising from ordinary declarations, self-assessments and voluntary amendments.
- The social assistance programs, worker income maintenance programs and job protection currently in force would be extended, until December 2020, due to the COVID-19.
- Taxpayers with the obligation to file the IR-1 Form are exempt from the payment of the first IIT advance payment generated by the tax return for the 2019 fiscal period, provided that the total income presented does not exceed DOP$8,700,000.00.
- Digitalization, via the OFV, of IT-Form amendments for the months elapsed in 2019 and 2020.
- Ease of renewal for pending Road Tax, via the following link: www.dgii.gov.do/marbetes/.
- After the approval of the Ministry of Finance, as of April 2nd and during the state of emergency, the following goods will be free of Tariffs and VAT: garments and clothing accessories (used exclusively in clinics and hospitals, including disposables), rubber surgery gloves, disposable gloves for use in medical exams and laboratories, non-woven fabric face masks, resuscitation respiratory machines, CT scanners, medical and surgical sterilizers, hydrogen peroxide and thermometers for clinical use.
- Ease measures aimed at expedited processing of imports of merchandise arriving as donations and other specific inputs intended to protect against COVID-19.
- Deferment of ISC on fuels and special contribution of liquefied petroleum gas for several fiscal weeks.
- Transitory VAT exemption on the import of raw materials, industrial machinery and capital goods that enjoy a 0% Tariff rate and that apply for Proindustria’s tax incentives.
- Enabling the OFV to request the issuance of real estate certifications for entities and individuals, as well as other certifications for individuals.
- Granted a 30 day deferment for the Monthly Returns and Forms corresponding to the fiscal periods affected by the cessation of operations. Such will be counted from the restart of operations of taxpayers who, due to their economic activities, are prevented from operating during the state of emergency,
- Enabled a process for discharging motor vehicles digitally.
- Taxpayers who make contributions to their suspended employees, whether they are under the Employee Solidarity Assistance Fund (ESAF) or not, will be able to present and remit the amounts paid, as well as the withholdings of the CIT practiced on these personnel, through the SUIRPLUS platform of the Treasury of the Social Security.
- Exemption of the first payment of Asset Tax for Legal Entities and Individually Owned Businesses, classified as micro, small and medium-sized enterprises (Mipymes). Some conditions apply.
- Ease of amendments for the tax returns presented through the OFV.
Furthermore, as of April 21, 2020, the DGII’s Local Administrations, Service Centers, Collection Offices, Payment Offices, and Motor Vehicle Offices, resumed the provision of in-person assistance with appointments from 8:00 a.m. to 3:00 p.m. The Contact Center, Phone Line, and Social Media sites, are still be available Monday through Friday from 8:00 a.m. to 5:00 p.m. The Contact Center is also be available on Saturdays from 8:00 a.m. to 12:00 p.m. The OFV can be accessed 24/7; 2 emails for queries regarding the OFV have been enabled. Additionally, the DGII gave access to a remote service email per Local Administration, as well as access to the Single Portal for Requesting Access to Public Information (SAIP) for information requests.