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General Standard on Country-by-Country Report

General Standard on Country-by-Country Report

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On October 5, 2021, the Internal Revenue Service issued General Standard No. 08-2021, approving General Standard on Country-by-Country Report, which contains the following:

1. Standard scope

Taxpayers who are Ultimate Parent Company or Member Entity of a Multinational Group that are tax residents of the Dominican Republic and whose consolidated income is equal to or greater than RD$38,800,000,000.00 (thirty-eight thousand eight hundred million Dominican pesos and 00/100) are covered by General Standard.

2. Member entity

A member entity is:

  • a separate entity from the Multinational Group included in the consolidated financial statements of the Multinational Group for financial reporting purposes or that would be included if the equity interests of such entity were traded on a stock exchange; 
  • an entity excluded from the consolidated financial statements of the Multinational Group solely based on size or significance; and 
  • a permanent establishment of a separate entity of the Multinational Group that is covered by (i) or (ii) above, provided that such entity prepares, for such permanent establishment, separate financial statements for financial reporting, regulatory, tax, or internal management control purposes.

3. Reporting obligation

The reporting shall be no later than twelve (12) months after the last day of the closing of the fiscal year of reporting of the Multinational Group. Every Ultimate Parent Company of a Multinational Group that resides for tax purposes in the Dominican Republic shall file the Country by Country Report.

It should be noted that the Country-by-Country Report consists of an annual report through which the parent company or the reporting entity, as applicable, must submit the information contained in Annex I of General Standard.

4. Member entity other than the ultimate parent company

A Member Entity residing for tax purposes in the Dominican Republic, which is not the Ultimate Parent Company of a Multinational Group, shall file the Country by Country Report before the DGII, no later than twelve (12) months after the last day of the closing of the fiscal year to file the information of the Multinational Group, if any of the following conditions are met: 

  1. The Ultimate Parent Company of the Multinational Group is not required to file a Country-by-Country Report in the jurisdiction of its tax residence; 
  2. The jurisdiction of tax residence of the Ultimate Parent Company has an International Agreement in force to which the Dominican Republic is a party, but does not have an Eligible Competent Authority Agreement in force to which the Dominican Republic is a party as of the due date to file the Country-by-Country Report for the fiscal year of reporting; 
  3. The jurisdiction of tax residence of the Ultimate Parent Company has committed a Systematic Omission that has been notified by the DGII to the Member Entity resident for tax purposes in the Dominican Republic.

5. Country-by-Country Report use

The DGII will use the Country-by-Country Report to comprehensively assess transfer pricing and other risks related to tax base erosion and profit shifting in the Dominican Republic, assessing, in particular, the risk of non-compliance by members of the Multinational Group with applicable transfer pricing regulations and, if applicable, for statistical and economic analysis purposes. The DGII will not rely on the Country-by-Country Report to make transfer pricing adjustments.

6. Application of the general standard

The general standard will apply as of the Reporting Fiscal Year 2022 of the Multinational Group.

Source: Dirección General de Impuestos Internos 06/10/21

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