Tax Reform Law No. 288-04
LAW 288-04
WHEREAS under the stand-by agreement with IMF
International, the Dominican government promised in point 7 of the Memorandum
Economic Supplement to prepare a proposal for tax reform policies;
WHEREAS result of agreements with the World Trade Organization, as well
as the Free Trade Agreement with the United States of North America,
revenues from customs taxes will be significantly reduced, so
the Dominican State must establish levies to compensate for the reduction
such income;
CONSIDERING that in order to make more efficient the process of collection of taxes to
charge of tax administration, it is essential to correct the distortions
contains the Tax Code;
CONSIDERING that the Dominican State revenues will be reduced by
effect of the disappearance of several established taxes temporarily, as well as
the elimination of the minimum tax of one point five percent (1.5%) to revenues
gross;
WHEREAS: It is necessary to implement a fiscal policy that contributes to the
sustainability and balance of public finances, as a way to achieve stability
Macroeconomic.
Having regard to the Law No.11-92 of May 16, 1992, which established the Tax Code, and
modifications;
Having regard to the Law No.18-88 of February 5, 1988, which establishes an annual tax
called tax Sumptuary Housing and Urban Lots, and
amended;
Having regard to the Act No.2569 of December 4, 1950, Tax on Successions and
Donations, as amended;
HAVING SEEN Law No.6-04, of January 11, 2004, Organic Law of the National Bank
Housing Development and Production;
HAVING SEEN Law No.3-04, of 9 January 2004 amending the Excise Tax
Consumption;
Having regard to the No.147-00 Act of 27 December 2000 on the Tax Reform,
amended by Law 12-01, of January 17, 2001;
Having regard to the Law No.831, of March 5, 1945, that a proportional tax subject to the
acts operated by registrars of securities;
Having regard to the Act No.1041 of November 21, 1935, amendments to the Commercial Code, and
provisions on the formation of joint-stock companies;
Having regard to the Law No.3341, of July 13, 1952, establishing an additional tax
real estate transactions;
HAVING SEEN NO.5113 Act of April 24, 1959, as amended;
Having regard to the Law No.32 of 10 October 1974 on the contribution of two percent (2%)
on real estate transactions (conveyances acts);
Having regard to the Act No.834 of July 15, 1978, amending the Code of Civil Procedure.
He HAS PASSED THE FOLLOWING LAW:
Art. 1.- additional paragraph of Article 248 of the Law No.11-92, May 16 is amended
the 1992 Tax Code, to read as follows:
"Paragraph.- not commit this offense, but in Mulberry, who pays spontaneously
after the deadlines, the tax omitted any. Tax differences
determined as a result of audits performed and estimates of trade
by the tax authorities, they are subject to the penalties set forth in Article 252
this law."
Art. 2.- k) subparagraph of Article 287 of the Act No.11-92, the Tax Code is amended
to read as follows:
"K) Losses: Losses suffer damages businesses in their fiscal years will
deductible profits earned in subsequent fiscal years to the
losses without such compensation may be extended beyond three years. Without
But in no case be countervailable in the current period or future losses
from other entities with which the taxpayer has made some process
reorganization after the publication of this law. "
Art. 3. A paragraph was added to literal m) of Article 287 of the Law No.11-92 of the Code
Tax, to read as follows:
"Paragraph.- When an individual makes use of the deductions referred
the literal present, on the occasion of their business activities, may not use the
tax exemption provided for in Article 296 of the same Code. "
Art. 4. a paragraph to paragraph d) of Article 288 of the Act No.11-92, the Code is added
Tax, to read as follows:
"Paragraph.- also be considered deductible expenses surcharges, penalties and interest
applied as a result of breach of any tax law. "
Art. 5. A paragraph was added to Article 288 of the Act No.11-92, the Tax Code, for
read as follows:
"When a taxpayer Paragraph.- present his affidavit and in the process
control is made objections relating to a), b) and e) of this
Article, the taxpayer will be applied a fine equivalent to twenty five
percent (25%) of each contested expenditure, without prejudice of surcharges and interests
corresponding indemnification may be applicable. "
Art. 6.- Section 296 tax rate Persons of the Act is amended No.11-92,
of 16 May 1992, the Tax Code, as amended by Law 147-00, 27
December 2000, to read as follows:
"Art. 296. TAX RATE OF INDIVIDUALS
"The resident or domiciled in the country individuals pay on net income
Taxable fiscal year, the amounts resulting from applying progressively, the
following scale:
1. Revenue RD $ 0.00 to RD $ 240,000.00 exempt.
2. The surplus RD $ 240,000.01 to $ 360,000.00 RD to 15%.
3. The surplus RD $ 360,000.01 to $ 500,000.00 RD to 20%.
4. The surplus of RD $ 500,000.01 25% onwards.
"The scale established Paragraph.- will be adjusted annually for cumulative inflation
corresponding to the previous year, according to figures published by the Bank
Central of the Dominican Republic.
Art. 7. Paragraph I is amended and paragraph VI of Article 308 of the Act repealing No.11-92,
the Tax Code, to read as follows:
"Paragraph I. Credit allowed the moral person against his income tax: If a
moral person withholds any amount under this article, this amount will constitute a
credit against the tax imposed in Article 267 on the income of the moral person
making the distribution for the fiscal year retention takes place, as long as
the distributed value paid income tax. "
Art. 8 are amended paragraph a) and paragraph d) of paragraph I of Article 309 of the Law No.11-
92 of the Tax Code to read as follows:
"Paragraph I. The retention provided in this article will be in the percentages of gross income
which indicated below:
"A) 10% on amounts paid or credited to account for rental or
lease of any type of movable and immovable property;
"D) 2% of the payments made by the state and its agencies, including the
state enterprises and decentralized and autonomous agencies, to individuals and
legal, for the acquisition of goods and services in general, not in relation
dependence;"
Art. 9.- Section 314 of the Act No.11-92, the Tax Code, is amended to read
as follows:
"Art. 314. Payment of Advances
"From fiscal year 2006 all taxpayers of income tax that may be
Legal entities pay their advances based on twelve equal monthly installments to
One hundred percent (100%) of income tax liquidated in the previous period. For him
For natural persons domiciled in the country undivided, while their
income does not come from commercial and industrial activities they shall be required to make
payments of tax on the current year, equivalent to one hundred percent
(100%) of paid in the previous year, in the months and imposed following percentages:
sixth month, fifty percent (50%); ninth month, thirty percent (30%), and twelfth
months, twenty percent (20%). When revenues come from commercial activities and
industrial, the advance shall be paid as if they were legal persons. Of the sums
as advances to pay for credit balances and that form will be deducted, if not any
applied for compensation or reimbursement. Capital companies may offset the
credit from dividend distribution in cash advances to pay,
prior information to the administration.
"Paragraph (Transitory). Companies that during fiscal year 2004 payments made
an advance on the basis of one point five percent (1.5%) of gross income,
They paid during fiscal 2005, in respect thereof, an amount equal to the
advances liquidated during fiscal year 2004. These payments will not be subject to any
of deductions for credit balance. Advances are pending
payment during the months of calendar year 2004, they shall be paid according to the system
force before the publication of this law. "
Art. 10. Article 341 is amended and paragraph of the Law No.11-92, May 16
1992 Tax Code, to read as follows:
"Article 341. Rate 16%. This tax is paid at a rate of 16% on the basis
taxable, as provided in Article 339 of this Code.
"Paragraph.- the case of advertising services, the applicable rate will be six
percent (6%) until 31 December 2004. From 1 January 2005 until 31
December 2005 the rate will be 10% and from 1 January 2006 the rate will be
16%. "
Art. 11. The application of this tax is eliminated tariff heading 2402.10.00. HE
modify the rates of tariff items 2403.10.00 and 2403.99.00 in Article 375,
of Law No.11-92 of May 16, 1992, the Tax Code, and paragraphs, so that
it reads as follows:
TARIFF CODE DESCRIPTION RATE
2403.10.00
Snuff tobacco, whether
with snuff substitutes
in any proportion.
130
2403.99.00 Other 130
"Paragraph I. In the case of alcohol products, alcoholic beverages and beer, the
amounts of excise tax to be paid per liter of absolute alcohol will be
established according to the following table:
Code
tariff Description
Rode
specific
2004
Rode
specific
2005
Rode
specific
2006
Rode
specific
2007
Rode
specific
year 2008
22.03
Beer Malta
(Except extract
malt)
326.03 302.99 279.95 256.91 233.87
22.04
Wine grapes
fresh, even
heading must
grape, except
heading
217.26 221.42 225.57 229.71 233.87
22.05
Vermouth and other
wine grapes
fresh prepared
with plants or
substances
aromatic
217.26 221.42 225.57 229.71 233.87
22.06
Other beverages
Fermented (by
example, cider,
perry, mead,
mixtures
drinks
fermented and
drinks
alcoholic not
included
other part)
326.03 302.99 279.95 256.91 233.87
22.07
Ethyl alcohol without
denatured
an alcoholic strength
volumetric
or higher
80% vol. alcohol
ethyl and
schnapps
denatured,
any
136.50 160.85 185.19 209.52 233.87
graduation
22.08
ethyl alcohol without
denatured
an alcoholic strength
volume of less
80% vol., spirits
and brandy,
other beverages
spirits,
preparations
alcoholic
composed of
kind of
used for
elaboration of
drinks.
136.50 160.85 185.19 209.52 233.87
2208.20.00
schnapps
grapes (Cognac,
Brandys, Staple)
381.59 344.66 307.73 270.80 233.87
2208.30.00 Whisky 324.77 302.04 279.32 256.59 233.87
2208.40.00
Rum and other
spirits
Reed
136.50 160.85 185.19 209.52 233.87
2208.50.00 Gin and Geneva 181.95 194.94 207.92 220.89 233.87
2208.60.00 Vodka 354.98 324.71 294.42 264.15 233.87
2208.70.00 Spirits 341.73 314.78 287.81 260.84 233.87
2208.90.00 Other 348.95 320.18 291.41 262.64 233.87
"Paragraph II This excise tax per liter of absolute alcohol is independent
any other tax and shall not be considered as part of the price for the calculation of the base
tax of any other tax or contribution.
"Paragraph III In the case of alcohol products, alcoholic drinks and beer, the
amounts of excise tax applicable to each fiscal year will be those
determined taking into account the amounts indicated in the table described in paragraph I
Article 375 for the corresponding year. In January 2005, these amounts will be
adjusted rate for the period from July to December 2004 inflation as
the figures published by the Central Bank of the Dominican Republic.
From April 2005, the amounts of the Excise Tax applicable to
alcohol products, alcoholic drinks and beer will be adjusted quarterly by the
rate for the previous quarter accumulated inflation, according to
Figures published by the Central Bank of the Dominican Republic. From the year 2009
amounts determined for 2008 will be adjusted quarterly in accordance with the
inflation published by the Central Bank of the Dominican Republic.
"Paragraph IV The Directorate General of Internal Revenue shall request the Directorate General of
Standards (DIGENOR), a categorization of products based on alcohol content
of absolute alcohol.
"Paragraph V. In the case of snuff cigarettes containing a set amount
selective specific consumption tax per pack of cigarettes, according to the following
table:
Specific code Description Amount per pack of
Cigarette 20 units
Cigarettes containing 2402.20.0
snuff RD $ 13.44
2402.90.00 Other RD $ 13.44
Specific amount per pack of 10 units of Cigarette
Cigarettes containing 2402.20.00
snuff RD $ 6.72
2402.90.00 Other RD $ 6.72
"Paragraph VI When the cigarette packaging presentation is different from the
presentations given in the above table, the amount of the flat tax will be applied
proportionally.
"Paragraph VII.- This excise tax per pack of cigarettes is independent
any other taxes and not be considered as part of the price for the calculation of the base
tax of any other tax or contribution.
"Paragraph VIII From April 2005, the amounts of excise tax
applicable to cigarettes, they will be adjusted quarterly by the cumulative inflation rate
corresponding to the immediately previous quarter, according to figures published by the
Central Bank of the Dominican Republic. "
"Paragraph (Transitory). In January 2005, the amounts of Excise Tax
applicable to cigarettes, they will be adjusted by the inflation rate for the period
July-December 2004 according to figures published by the Central Bank of the Republic
Dominican.
"Paragraph IX.- a tax of twenty-five percent (25%) on the price is established
Sales ex-bottling soft drinks and sodas that use as sweeteners, syrups
high fructose in their production processes.
Art. 12. Articles 381 and 382 of the Tax Code, are reset to say about
as follows:
"Article 381.- TELECOMMUNICATIONS SERVICE: RATE 10%. Services
include telecommunications, transmission of voice, images, written and printed materials,
symbols or sounds via the telephone, telegraph, wire, radio,
wireless, satellite, submarine cable or any other means other than transport
vehicle, air or land. This concept does not include broadcasts programs made by
radio and television stations.
"Article 382. A tax of 0.0015 (1.5 per thousand) of the value of each is established
check of any kind, paid by banks and financial intermediation
as payments made through electronic transfers.
Transfers as payments to third parties in the same bank
They taxed with a tax of 0.0015 (1.5 per thousand).
This tax cash withdrawals are excluded both ATMs and the
bank offices, consumption credit cards, payments under the Social Security,
transactions and payments made by pension funds, payments made in favor
the Dominican State for taxes and transfers that the State
should make these funds. This tax will be presented and paid in the DGII, in the form and
conditions established. "
Art. 13. Articles 1, 2 and 3 of the amended Act No.18-88 of 5 February 1988, the
Tax Sumptuary Housing and Urban Lots and
modifications, to say as follows:
"Section 1. an annual tax called Property Tax is established
Real Estate, Sumptuary Housing and Urban Lots, to be determined
the value established by the Directorate General of National Land Registry.
"Paragraph (Transitory). IVSS taxpayers than the date of entry into force of
this law estuvieren remiss in paying the tax, will have a period of six
months to submit a corresponding statement IVSS. Once completed this term
without submitting the declaration, it will be punished with a fine equivalent to
2% of the property value, in addition to any other applicable sanction. "
"Section 2. The property subject to this tax are:
"A) Those for housing, whose value including the site where they are built,
exceeds five million pesos, adjusted annually for inflation;
"B) Solar unbuilt and those non-residential properties, including
professionals such as those for commercial, industrial, and whose value
exceeds five million pesos (RD $ 5,000,000.00).
"Paragraph I.- is deemed as Urban Lots those in which not
You have raised a formal construction legalized by the competent bodies
(Ministry of Public Works and Communications, municipal councils and
others covered by the laws or decisions of the government), for housing or
commercial activities of all kinds and those whose buildings occupy less than one
30% of the total area of the site.
"Paragraph II is excluded from this tax that house whose owner has fulfilled
sixty-five (65) years of age, provided that the housing has not been transferred from
owner in the last fifteen (15) years, and its owner only owns the property
this housing estate.
"Paragraph III It is understood that this is imposed only solar and
buildings of encumbered property and therefore not part of the base
Taxable rural lands dedicated to the farm, as well as furniture,
equipment, machinery, power plants, furniture and other goods that
are within the encumbered property.
"Paragraph IV In the event that the property described in paragraph" b "of this article are
owned by legal entities with organized accounting, this declaration
sworn operations and pay income tax, the basis for applying this rate
tax will be the acquisition cost, adjusted for inflation until its last fiscal year.
If the legal person does not present transaction or acquisition cost not
has been updated, the value of the property shall be the value determined by the Directorate
General of the National Land Registry.
"Section 3. RATE: The property subject to the tax will be taxed at one
percent (1%) of the value determined for them. In the case of property that
It referred to in subparagraph a) and paragraph b) of Article 2 of this law, this will be applied on the
surplus property value, after deducting five million pesos
(RD $ 5,000,000.00) untaxed. "
Art. 14.- From 1st. January 2005, all taxes not included within the
Tax Code, except for the stamps, seals, caps, records and padlocks used
for control of local production and importation of finished products, which have been
They set specific values below RD $ 30.00 in value will be adjusted to
RD $ 30.00, this which should be adjusted annually for inflation, value in accordance with
the rules in the Tax Code. If necessary, the administration
tax shall be empowered to establish the design of the stamps and payment of
same.
Art. 15.- Every taxpayer who in the twelve months following the entry into force of the
This law repatriare to the Dominican Republic capital or funds has in the
outside, it will be allowed to register themselves within their DGII reported in accounting,
paying one percent (1%) of the amount repatriated.
Similarly, taxpayers who to date have not received their correction
heritage provided in Section 1 of Law 11-01 of January 17, 2001, may
do so until December 31, 2004, liquidating the Directorate General of Taxes
Internal equivalent to one percent (1%) of the difference in the value of assets
tight.
Paragraph.- The effect you have the process of correcting the financial statements of the
individuals, legal entities and single owner businesses on the value of assets
themselves, will not generate tax effect or liability for taxes imposed in
titles that make the Tax Code.
Art. 16. Article 6 of Law No.2569 of December 4, 1950, is amended to
Taxes on inheritance and gifts, as amended, to read the
Following way:
"Art. 6. The rate of this tax is 3% of the mass sucesoral after made
the corresponding deductions, in the case of succession. While for
donations tax rate will be 25% of the value of the donation. Resources and
penalties for this tax are set out in Title I of the Code
Tax.
"Paragraph (Transitory). In the case of debts by sucesorales taxes, originated before
the entry into force of this law, the tax may be settled on the basis of the
rate established in this article as long as all stakeholders pay
tax before December 31, 2004.
The DGII provide by rule, as host of this provision taxpayers
tuvieren partial outstanding balances of this tax, upon entry into effect
this law. "
Art. 17.- hereby repealed Article 5 of Law No.2569 of December 4, 1950, of
Taxes on inheritance and gifts, as amended.
Art. 18.- paragraph d) of Article 7 of Law No.831, of March 5, 1945 is amended
that subject to a tax proportional acts operated by registrars of securities,
to read as follows:
"D) The contributions in kind to the share capital of domestic companies, as well as
social contributions consist of property registered both in case of organization
as reorganization of national companies. "
Art. 19. This law revokes, exemptions from income tax and ITBIS,
No.6-04 referred to in the Act of January 11, 2004, Organic Law of the Bank
Housing Development and Production.
Art. 20.- From the entry into force of this law, are subject to a tax of
three percent (3%) real estate transfers established by Laws 831, 5th
March 1945, which subject to a proportional tax acts operated by
registrars of securities, No.32, of 14 October 1974 on the contribution of two
percent (2%) on real estate transactions (conveyances acts); No.3341, July 13
1952, it is establishing an additional tax on real estate transactions; NO.5113, the
April 24, 1959, amending Article 2 of the Law No.5054, dated 18 December
1958, as amended. The aforementioned 3% applied on the market value of the
property transferred, and replace all taxes indicated in the aforementioned law.
They are also subject to this tax, transfers of property acquired
through loans granted by financial intermediaries of the system
financial, provided that the acquired dwelling or solar intended for this purpose with such
loans, have more than one million pesos value, this value will be adjusted
annually for inflation.
Art. 21. Article 9 of Law No.1041 of November 21, 1935, is amended to
amendments to the Commercial Code, and provisions relating to the formation of companies by
actions, so that henceforth read as follows:
"Art. 9. The establishment of joint stock companies, joint-stock companies,
It is subject to a tax of 0.5% (half of one percent) of the capital authorized
thereof, which shall in no case be less than one thousand pesos (RD $ 1,000.00). East
tax also apply to companies and participation in fact, having the
same be calculated on the basis of capital agreed in the contract or agreement giving
birth to that company. The capital increases will pay the tax with the same
rate.
"Paragraph.- This tax will be paid at the Directorate General of Internal Revenue, and receipt
Payment must be submitted to the Director of the Commercial Register and also to
any other public or private entity in which the registration of documents required
establishing the company or firm formed made. These officials do not
shall record the documents indicated until they present a receipt of
payment, which will be recorded in the documents issued to interested parties. He
Failure to comply with this formality will be punished according to the Tax Code. "
Art. 22.- This law repeals any legal provision contrary to it.
GIVEN in the Hall of Sessions of the Chamber of Deputies, National Congress, in
Santo Domingo de Guzman, National District, Capital of the Dominican Republic, the
twenty (26) days of August two thousand and four (2004); 161 years
Independence and 142 of the Restoration.
Alfredo Pacheco Osoria
President
Nemencia de la Cruz Hernandez Abad Ilana Neumann
Secretary Secretary
GIVEN in the Hall of Sessions of the Senate, National Congress, in Santo Domingo
Guzman, National District, Capital of the Dominican Republic, on the twenty (23) days
of September of the year two thousand and four (2004); 161 years of Independence and 142
Restoration.
Andres Bautista Garcia
President
Melania Salvador Jimenez Juan Antonio Morales Vilorio
Secretary Secretary
LEONEL FERNANDEZ
President of the Dominican Republic
In exercise of the powers conferred upon me by Article 55 of the Constitution of the
Republic.
ENACT this Law and order that it be published in the Official Gazette, for
knowledge and compliance.
DONE in the city of Santo Domingo de Guzman, National District, Capital of the Republic
Dominican, at twenty (28) days of the month of September in the year two thousand and four (2004);
161 years of Independence and 142 of the Restoration.
LEONEL FERNANDEZ
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