Meet your tax obligations for related-party transactions with technical documentation, defensible analysis, and specialized support.
What Your Company Needs to Keep in Mind in the Dominican Republic
Tax Authority
Compliance with transfer pricing regulations is reviewed by the General Directorate of Internal Taxes (DGII).
Companies with transactions between related parties may be subject to the Informative Declaration of Related-Party Transactions (DIOR), the Local Report, the Master Report, and, where applicable, the Country-by-Country Report.
Key Obligations
A lack of supporting documentation may result in income tax adjustments, denial of deductions, surcharges, interest, formal penalties, or increased exposure to tax audits.
Non-compliance Risks
Compliance deadlines in the Dominican Republic depend on the taxpayer’s fiscal year-end:
120 days after the fiscal year-end: Filing of the DIOR along with the Annual Income Tax Return.
180 days after the DIOR deadline: Filing of the Local Report and Master Report, where applicable.
12 months after the group’s fiscal year-end: Filing of the Country-by-Country Report, where applicable.
Functional analysis of roles, assets, and risks.
Benchmarking or comparability analysis, where applicable.
Identification of the related parties involved.
Financial information on the taxpayer and the operations analyzed.
Elements that typically form part of the analysis
In the Dominican Republic, transactions between related parties must be conducted in accordance with the principle of effective independence; that is, under conditions comparable to those that independent parties would have agreed upon under similar business circumstances.
Transfer pricing documentation allows for substantiating the reasonableness of intercompany transactions, supporting the information submitted in the DIOR, preparing the applicable reports, and having technical evidence available in the event of potential requests from the General Directorate of Internal Revenue.
Compliance in the Dominican Republic involves reporting, documenting, and substantiating related-party transactions
Selection of the applicable transfer pricing method.
Description of the intercompany transactions carried out.
Review of contracts, invoices, and supporting documentation.
Conclusion regarding compliance with the principle of effective independence.
Download the Transfer Pricing Compliance Roadmap for the Dominican Republic
Find all the key steps, dates, and obligations your company must review to properly comply with Dominican regulations in a single document.
Before ensuring compliance in the Dominican Republic, check that you have:
Clear identification of transactions with related parties.
A review of applicable obligations based on the fiscal year-end, taxpayer profile, and required reports.
Contracts, invoices, and supporting documentation for the transactions.
A functional analysis of the entities involved.
Segmented and reconciled financial information.
Benchmarking or comparability analysis, when applicable.
Consistency between intercompany policies and the group’s actual operations.
Relevant reports prepared in accordance with the deadlines established by the DGII.
Leaders in Transfer Pricing Advisory Services in Latin America
Our team can assist you in reviewing, preparing, or strengthening your transfer pricing documentation in the Dominican Republic, taking into account local regulations and your business group’s actual operations.
Local Documentation
Benchmarking
Review of Intercompany Policies
Support during audits or in response to regulatory requests
We assist business groups with operations in various countries across the region, combining local compliance, a regional perspective, and specialized technical support.
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Why Choose Grupo Consultor EFE® for Your Transfer Pricing Compliance
Experience in documenting and analyzing intercompany transactions.
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Support for local businesses, business groups, and companies with international operations.
Support in the Dominican Republic and other Latin American countries for companies with multinational structures.
Integrated Vision
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Differentiated
Documentation prepared to comply with, support, and defend the transaction during audits.
At Grupo Consultor EFE®, we understand that transfer pricing compliance is not merely a tax obligation. It can also serve as a tool to strengthen decision-making, assess the efficiency of intercompany transactions, and anticipate risks in an increasingly regulated environment.
The support they provide throughout the entire process is consistent and highly responsive. Their commitment to completing each stage is evident, as is the high level of professionalism with which they approach every project. Their approach builds trust from the start, and the results clearly reflect their serious and responsible approach. The way they engage and deliver on their promises is truly exemplary.
Companies That Have Placed Their Trust in Us
Real results from business groups that demonstrate their compliance with our technical support.
Rosa Delia Silva Pineda
Flextronics
"
Working with your team has been a positive experience from start to finish. From our very first contact, they demonstrated a high level of professionalism, attention to detail, and clarity in communication. The results we achieved were fully in line with our expectations, which confirms the quality and effectiveness of your services.
Argentina Hidalgo
EMASAL Group
"
It was my first time working on transfer pricing; the support and follow-up were excellent and appropriate. At our corporate office in San Diego, we were asked to conduct a transfer pricing study; previously, our company’s accounting was handled by an external firm, and they were the ones who recommended Grupo Consultor EFE® to us.
Pablo Rafael Xep
CPS
"
Transfer pricing regulations in the Dominican Republic are primarily set forth in the Tax Code, as amended by Law No. 253-12, as well as in Decree 78-14, Decree 256-21, and General Rule 08-21 issued by the General Directorate of Internal Revenue.
These provisions establish that transactions between related parties must be conducted in accordance with the arm’s-length principle, supported by documentation, and the corresponding returns or reports must be filed when the taxpayer falls under the applicable circumstances.
Transfer Pricing Regulations in the Dominican Republic
Law No. 253-12 amended Article 281 of the Tax Code of the Dominican Republic, incorporating rules to ensure that transactions between residents and related parties—whether foreign or located in territories with preferential tax regimes—are conducted under conditions comparable to those agreed upon between independent parties.
Decree 78-14 established the Transfer Pricing Regulations, expanding the technical scope of Dominican regulations. Subsequently, Decree 256-21 introduced requirements related to the Local Report, Master File, and Country-by-Country Report, aligning local regulations with international standards. General Regulation 08-21 supplements the filing requirements and content specifications for the Country-by-Country Report.
Applicable Legislation in the Dominican Republic
Definition of a Related Party in the Dominican Republic
In the Dominican Republic, related parties are considered to be individuals, legal entities, or organizations with respect to which certain conditions of affiliation are met, provided that one of them is a resident or is located in the country.
These circumstances include direct or indirect participation in the management, control, or capital of another entity; the participation of the same persons in the management, control, or capital of both parties; the existence of permanent establishments; parent companies; agents, distributors, or exclusive dealers; as well as transactions in which one entity assumes significant expenses, losses, or risks of another.
The correct identification of related parties is essential for determining whether there is an obligation to perform analysis, prepare documentation, file a DIOR, a Local Report, a Master Report, or a Country-by-Country Report.
Informative Declaration of Transactions Between Related Parties
Taxpayers subject to the transfer pricing regime must file the Informative Declaration of Related-Party Transactions (DIOR) annually through the DGII’s Virtual Office.
The DIOR allows taxpayers to report details of intercompany operations or transactions conducted with related parties abroad, individuals or legal entities resident in low-tax jurisdictions or tax havens, as well as related or affiliated parties benefiting from the Free Trade Zone Regime.
Reference Date:
120 days after the fiscal year-end: Filing of the DIOR together with the Annual Income Tax Return.
Supporting Documentation
Taxpayers subject to the Transfer Pricing regime must have documentation explaining the process for valuing or assessing the prices agreed upon in transactions with related parties.
This documentation may include identification of the taxpayer and its related parties, details of transactions, the country of domicile of the related party, the basis for the relationship, the valuation method, price ranges or margins, financial information, functional analysis, contracts, invoices, comparables, and technical conclusions supporting the reasonableness of the transactions.
Local Report or Transfer Pricing Study
The Local Report or Transfer Pricing Study must explain the process for valuing or evaluating the transfer prices agreed upon with related parties. This report must contain information on the local entity, related-party transactions, and financial information.
Reference Date:
180 days after the DIOR filing deadline: Filing ofthe Local Report, when applicable.
Master File
The Master File applies to taxpayers who engage in transactions with related entities under the established conditions and who are part of a multinational group. This report provides an overview of the group, its organizational structure, business activities, intangibles, financial activities, and financial positions.
Reference Date:
180 days after the DIOR filing deadline: Filing ofthe Master Report, where applicable.
The Country-by-Country Report applies to multinational groups that exceed the consolidated revenue threshold established by Dominican regulations. This report contains tax and economic information by jurisdiction, including revenue, profits, taxes paid, reported capital, employees, and tangible assets, among other indicators.
Reference Date:
12 months after the last day of the multinational group’s fiscal year-end: Filing of the Country-by-Country Report, where applicable.
Documentation and supporting information regarding transfer pricing must be maintained in an orderly manner for the period specified by tax regulations. In the Dominican Republic, taxpayers must retain and present the documentation required by the Tax Administration upon request.
Salvadoran regulations provide for various methods to assess whether transactions between related parties are conducted at arm’s length.
Accepted Methods:
The selection of the method must take into account the nature of the transaction, the availability of comparable information, the functions performed, the assets used, and the risks assumed by the parties involved.
The documentation submitted to the tax authority must be prepared in Spanish.
Dominican Republic law does not provide for special treatment for small and medium-sized enterprises with regard to transfer pricing. However, there may be exceptions regarding the preparation or filing of certain reports, depending on the transaction amount, type of transaction, and relationship with related parties.
Dominican regulations provide for various methods to assess whether transactions between related parties are conducted in accordance with the arm’s-length principle.
Accepted Methods:
The selection of the method should take into account the nature of the transaction, the availability of comparable information, the functions performed, the assets used, and the risks assumed by the parties involved.
In the Dominican Republic, both internal and external comparables are acceptable. External comparables may come from markets outside the country when local information is not available, provided they reasonably support the comparability analysis.
The analysis must consider the precise scope of the transaction, contractual terms, functions performed, assets used, risks assumed, characteristics of goods or services, economic circumstances, and business strategies.
The Dominican Republic is part of the Inclusive Framework of the BEPS project and has incorporated obligations aligned with international standards of tax transparency, including the Local Report, Master File, and Country-by-Country Report.
These changes aim to strengthen the exchange of information, increase oversight of related-party transactions, and align Dominican regulations with the OECD’s transfer pricing guidelines.
Failure to comply with transfer pricing reporting and documentation obligations may result in fines, tax adjustments, surcharges, interest, and increased exposure to audits by tax authorities.
If false or incomplete information is provided, the taxpayer may be subject to additional penalties under the Tax Code. If a tax adjustment to the transfer prices is confirmed, financial penalties may be imposed on the underpaid tax, without prejudice to other measures provided for in the applicable regulations.
Check your company’s compliance in the Dominican Republic
Schedule a consultation with our team to find out if your related-party transactions have the necessary technical support to ensure proper compliance in the Dominican Republic.
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