Enhanced Monitoring Report on the Implementation of the Standard on Transparency and Exchange of Information on Request 2026 Update (June)

Determinations

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

i.p.

n.a.

LC

Ratings

LC

LC

C

LC

C

C

C

C

C

LC

Recommendation (A.1, practice)

The Dominican Republic should continue monitoring inactive companies and review its system that allows non-complying inactive companies to retain legal personality on the Mercantile Register to ensure ownership information is available to the standard in all cases.

Underlying factor

The Dominican Republic has taken several measures to monitor companies that failed to register with the DGII [Tax Administration] or to renew their business certificate with the Mercantile Registry. However, inactive companies which have been non-compliant for more than three continuous years continue to retain legal personality.

(see paragraphs 63 to 70 of the Dominican Republic’s 2019 Report for more information).

Summary of actions reported

In 2021, the Dominican Republic amended the registration status applicable to taxpayers. The criteria of “inactive” taxpayers, as analysed in the 2019 Report, no longer exists. Previously, “inactive” companies were considered “withdrawn” (deregistered) if they remained inactive for five years. The Dominican Republic indicated that most of the inactive companies have been withdrawn now. The Dominican Republic introduced a new “suspended” status in 2024 for non-compliance with tax obligations. This status is given in the event of failure to file returns for 18 consecutive months in most cases. Suspended companies retain all their tax obligations, remain in the tax database, and their compliance is continuously supervised. Indeed, suspended companies are included in the Tax Administration’s audits programmes. The Tax Administration has created taxpayers' risk profiles based on criteria that denote a risk rating for non-compliance regarding registration of information, declarations and/or payment of taxes, among other criteria. The “suspended” status leads to tax deregistration only if there is no evidence of economic activity for a period of three years and the taxpayer has no debts or assets registered with the Tax Administration. A list of taxpayers that have been withdrawn from the tax register is publicly available to reduce the risk of third parties entering into transactions with them.

In addition, the Dominican Republic has enhanced its internal exchange of information mechanism between the Mercantile Registrar and the Tax Administration, which allows it to have access to all updated registered documents, including information on the partners, addresses, activities and registration dates.

Furthermore, the Tax Administration has imposed new restrictions for companies with a suspended status, in order to limit their operations in the Dominican Republic (e.g. making tax credit invoices inadmissible, limiting registration and transfer of real estate and vehicles, and preventing them from using the Electronic Invoice system, which is mandatory).

Conclusion

The Dominican Republic has made progress to address the recommendation. It should report further progress in its next self-assessment.

Measures reported show that the Dominican Republic has taken steps to improve its system of monitoring non-compliant companies. It has replaced the previous category of “inactive companies” with a new category of “suspended companies,” which are covered under the Tax Administration supervision programmes and has introduced a requirement to verify whether an entity has engaged in any economic activity before it is withdrawn from the tax register. However, this deregistration is an administrative tax measure that has no bearing on the legal personality of the company. Some companies that have been withdrawn from the tax register may have lost their legal personality, but this would only be the case if the deregistration was done following a liquidation or dissolution procedure. If the company has been withdrawn because it has been suspended for more than three years and has not carried out any economic activity during that time, such company retains its legal personality indefinitely. While the information provided reflects the measures taken to mitigate the risk of these companies when they conduct business in or from the Dominican Republic, it does not address all the underlying factors that motivated this recommendation, i.e. the risk that these companies continue to retain legal personality with no guarantee that their up-to-date legal and beneficial ownership information is available in the Dominican Republic.

Status determined

In the process of being addressed

Actions required

In its next self-assessment, the Dominican Republic should –

• Provide statistical information on the number of suspended companies, the percentage these companies represent over the total of companies existing in the Dominican Republic both as per the commercial register and the tax register.

• Provide supporting statistical information on monitoring and enforcement actions carried out during the monitoring period over the segment of suspended companies and the results of this supervision, especially regarding the availability of their legal and beneficial ownership information.

• Provide statistical information on the number of companies that have been withdrawn from the tax register, the percentage these companies represent over the total of companies existing in the Dominican Republic both as per the commercial register and the tax register. For the segment of companies that have been withdrawn from the tax register, indicate the number of companies that have been liquidated or dissolved and the number of companies that retain their legal personality (i.e. the ones withdrawn because they have been for more than three years under a “suspended” status with no further economic activity).

• Describe the measures taken to assess and mitigate the risk of non-availability of adequate, accurate and up-to-date legal and beneficial ownership information of companies that have been withdrawn from the tax register but retain their legal personality, including monitoring and enforcement actions carried out.

Recommendation (A.1, practice)

The Dominican Republic is recommended to monitor the effective implementation of rules concerning the identification and declaration of beneficial ownership information, notably by ensuring that adequate oversight and enforcement activities are carried out.

Underlying factor

Law 155-17 on AML/CFT entered into force in 2017. It foresees the obligation to maintain and update beneficial ownership information with the register of taxpayers. These provisions were recently enacted, and their implementation could not yet be fully assessed.

(see paragraphs 85 and 86 of the Dominican Republic’s 2019 Report for more information).

Summary of actions reported

The Dominican Republic has digitised its tools for updating beneficial ownership information, which has led to an increase in registration and made it easier for taxpayers to fill in their tax returns, including the annual declaration of beneficial ownership information which is a mandatory annex to the annual income tax return, as well as facilitating the control of the quality of the information and the continuous monitoring of the data. As of March 2025, the beneficial ownership register contained information of 99% of entities and arrangements with an “active” or “suspended” tax register.

Large taxpayers and companies undergoing a corporate reorganisation are required to submit, with their declaration of beneficial ownership, the supporting documentation on which the identification is based. For these entities, the Tax Administration systematically reviews the accuracy of the information reported by contrasting it with the supporting documents. If any inconsistency is found, the concerned entity is immediately required to amend it. In addition, for about 80% of legal entities, the Tax Administration has direct access to information on their partners and members, which helps it to verify the reported beneficial ownership information. The accuracy of information reported by entities and arrangements not covered by these actions falls under the general supervisory activities of the Tax Administration based on a risk-based approach. The Dominican Republic reported that any failures or inconsistencies are reported and sanctioned.

Conclusion

The Dominican Republic has made progress to address the recommendation. It should report further progress in its next self-assessment.

The digitisation process has facilitated the submission of beneficial ownership information, which has increased from 91% (in 2018) to 99% (in 2024). The Dominican Republic has put in place tools that assist the Tax Administration in the supervision of the accuracy of the information. Furthermore, it systematically reviews the accuracy of information reported by all large taxpayers and companies undergoing a corporate reorganisation. Finally, the Dominican Republic also supervises compliance of legal entities and arrangements not covered by the above-mentioned specific actions. This compliance is supervised through a risk-based approach. However, no information is available on the scope or results of the monitoring and enforcement activities carried out by the authorities nor on the supervisory actions taken regarding entities and arrangements other than large taxpayers and companies undergoing a corporate reorganisation to ensure that the information submitted is accurate, adequate and up to date. This information is necessary to ascertain the adequacy of the measures to monitor the effective implementation of the rules concerning the identification and declaration of beneficial ownership information.

Status determined

In the process of being addressed

Actions required

In its next self-assessment, the Dominican Republic should –

• Submit statistics on the compliance rate of the obligation to update beneficial ownership information annually with the Tax Administration and actions taken regarding non-compliant legal entities and arrangements.

• Provide a description of oversight activities carried out to ensure the accuracy of beneficial ownership information and their results (i.e. findings), together with relevant statistics on supervision and enforcement (for instance, number of verifications carried out and sanctions for non-compliance or inaccurate reporting).

Recommendation (A.2, practice)

The Dominican Republic should monitor compliance by inactive companies with their record keeping obligations to ensure that reliable accounting records are kept for all relevant entities and arrangements.

Underlying factor

Accounting records for companies considered as inactive may not exist or may not be available during the period of inactivity

(see paragraphs 155 and 156 of the Dominican Republic’s 2019 Report for more information).

Summary of actions reported

See Recommendation 1 above.

Conclusion

The Dominican Republic has made progress to address the recommendation. It should report further progress in its next self-assessment.

The Dominican Republic has reported actions taken to monitor domestically the economic activity of suspended companies and companies that have been withdrawn from the tax register. However, sufficient details to adequately assess the scope of the monitoring and enforcement actions carried out on these companies’ compliance with their accounting records keeping obligations, their effectiveness and results are not available.

Status determined

In the process of being addressed

Actions required

In its next self-assessment, the Dominican Republic should –

• Describe the monitoring and enforcement actions carried out to address the risk that accounting information of suspended companies and companies that have been withdrawn from the tax register but retain their legal personality (i.e. withdrawn because they have been for more than three years under a “suspended” status with no further economic activity) may not be available in line with the standard, with supporting statistical information where applicable, including information regarding the supervisory checks carried out on companies (including suspended companies and companies that have been withdrawn from the tax register but retain their legal personality) to confirm the availability of accounting records and the outcomes of such supervisory efforts (e.g. number of cases (and ratio) where non-compliance with accounting records keeping obligations was detected and the actions taken in case of non-compliance).

Recommendation (B.1, practice)

The Dominican Republic is recommended to monitor the effective implementation of recently amended legislation to ensure that banking information is accessed pursuant to an EOI request in a timely manner in all cases.

Underlying factor

The Dominican Republic modified its legal framework so that the competent authority can request banking information directly from financial institutions, without prior authorisation of the financial regulator or a court order. As these amendments were recently enacted, their effective implementation could not be fully assessed.

(see paragraphs 194 to 198 of the Dominican Republic’s 2019 Report for more information)

Summary of actions reported

For the monitoring period 2023-2024, the Dominican Republic has received ten requests relating to banking information, and has exchanged the information requested in all ten cases in a timely manner with an average response time of 34 days. In three cases the financial institution was identified in the request. In these cases, information was obtained and exchanged within ten days. In the other seven cases the Competent Authority had to seek this information through the Superintendency of Banks (as the financial institution was not identified in the request), and the average response time was 45 days.

Conclusion

The Dominican Republic appears to have taken appropriate actions to address the recommendation and is no longer required to report. It has accessed banking information in a timely manner directly from financial institutions and through the Superintendency of Banks. The timeliness of responses to banking information is good and no peer has raised any concerns in this regard.

Status determined

Considered provisionally addressed in the context of the monitoring process, subject to detailed validation

Actions required

No immediate action required

Recommendation (C.5, practice)

The Dominican Republic should ensure that its authorities continue to monitor the implementation of the new internal procedures to be able to respond to EOI requests in a timely manner.

Underlying factor

The Dominican Republic’s ability to timely answer EOI requests faced significant difficulty in the early part of the review period – with many requests taking nearly a year to receive a full response – but procedural changes made in 2016 have resulted in more recent requests being answered quite quickly, often within 90 days.

(see paragraph 282 of the Dominican Republic’s 2019 Report for more information)

Summary of actions reported

The Dominican Republic reported that it has provided a complete response to all the EOI requests received during 2023 and 2024 within 180 days, with 91% of the cases answered within 90 days. The Tax Administration uses its internal tools and periodic follow-ups with the relevant stakeholders to monitor the handling of EOI requests and ensure timely answers.

Conclusion

The Dominican Republic appears to have taken appropriate actions to address the recommendation and is no longer required to report.

Status determined

Considered provisionally addressed in the context of the monitoring process, subject to detailed validation

Actions required

In its next self-assessment, the Dominican Republic should provide updated timeliness statistics for the corresponding monitoring period, according to paragraph 29 of the Enhanced Monitoring Methodology.