Dominican Republic

THE NATIONAL CONGRESS

In the Name of the Republic

LAW No.22501

WHEREAS: The diversity of laws that currently make up our system

Tax constitute an imposition obsolete scheme, which prevents a performance

transparent and efficient by public servants against the interest of offering a service

highest quality to taxpayers;

CONSIDERING that becomes an obstacle for both the taxpayer and the

State, maintaining laws, whose contributions in terms of collection not

outweigh the discomfort they cause;

WHEREAS: The country is undergoing a process of modernization and simplification of

tax system, which is running the Dominican Government;

He HAS PASSED THE FOLLOWING LAW

UNICO ARTICLE: From the publication of this Act are repealed

following provisions:

a) Law No. 946, dated July 13, 1945, on cumulative sales and

Regulation No.4305, of April 30, 1947;

b) The Law No. 3705 of December 19, 1953, which regulates the recovery of claims in favor

State by way of cadastral surveying;

c) Articles 2 and 3 of Law 136 of 23 June 1983 amending Article 4 of

Law 142 of June 4, 1971, with regard to the seals that must adhere to the

written conclusions deposited in court on divorce;

d) Law 169, of June 4, 1971, which provides adhesion of a special stamp

internal taxes amounting to RD $ 1.00, to import manifesto that includes

consular invoice in which the value of the declared goods exceed

RD $ 100.00;

e) Law 137 of September 9, 1970, on Consular Rights;

f) Articles 3, 4, 5, 6 and 7 of Law 447 of April 7, 1982, which created two franchises

for playing winter baseball and established a tax of RD $ 0.25 and RD $ 0.10

on tickets sold and amendments thereto;

g) Article 51de Law 1494 of 2 August 1947, which created a tax of RD $ 0.10

for each page of the documents deposited with the Administrative Court;

h) Article 182 of Law 1192, dated May 16, 1992, which created the Code

Tax, which provides for the payment of a tax by a stamp of RD $ 1.00 to

each page of the documents submitted by individuals to the Dispute Tribunal

Tax;

i) Law 13787, of December 9, 1987, levied every 10 thousand packs

RD $ 50.00 cigarettes and per thousand packs of 20 cigarettes, RD $ 100.00;

j) The literal e) of Article 1 of Law 3988, of 26 May 1988, which establishes a

RD $ 0.05 tax per liter of gin, whiskey, beer and every pack of

20 cigarettes snuff blond.

GIVEN in the Hall of Sessions of the House of Representatives, the National Congress Palace,

capital of the Dominican Republic, on the twentieth day of March in the year two thousand and one,

158 of Independence and 138 of the Restoration.

Maximo Castro Silverio,

Acting vice president.

Manuel Odalis Mejia Arias, Rafael Angel Troncoso Franjul

Secretary AdHoc. Secretary.

GIVEN in the Hall of Sessions of the Senate, National Congress, in Santo

Dominican Guzman, National District, Capital of the Dominican Republic, twelve

(12) days of the month of June in the year two thousand and one (2001) 158 years of Independence and 138

Restoration.

Ramon Alburquerque, President

Dagoberto Rodriguez Adames, P. DINOCRATE ANGEL PEREZ

Secretary AdHoc. Secretary AdHoc.

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.

GIVEN in Santo Domingo de Guzman, National District, Capital of the Dominican Republic, the thirty-one (31) days of December, in the year two thousand and one (2001), 158 years

Independence and 139 of the Restoration.

LEY NUMERO 11­01 (Sobre Amnistía Fiscal) 

CONSIDERANDO: Que es necesario crear medidas que promuevan en el  contribuyente  el  cumplimiento cabal y transparente de sus obligaciones tributarias. VISTA: La ley 11­92, del 16 de mayo de 1992, que aprobó el Código Tributario de la Republica  Dominicana; HA DADO LA SIGUIENTE LEY: ART. 1.­ Se declara la amnistía fiscal para la corrección de patrimonio e inventario de todos los contribuyentes con obligación de presentar declaración jurada de Impuesto Sobre la Renta. ART.2.­ amnistía Fiscal para personas jurídicas y negocios de único  dueño (transitorio). Se  confiere una amnistía fiscal a las personas jurídicas y negocios de único dueño, que los liberara de  las fiscalizaciones que puedan realizarse a los tres últimos ejercicios fiscales que establece la ley 11­92, en el ámbito de los impuestos establecidos en los títulos II, III y IV del Código Tributario. Las personas jurídicas y negocios de único dueño que deseen acogerse a esta amnistía fiscal  deberán pagar a la administración tributaria el equivalente al uno por ciento (1 %) de los ingresos brutos correspondientes al ejercicio fiscal del año 1999, si dicha corrección se realiza antes del 31 de Mayo del 2001. Este pago se realizara de la siguiente manera: Un treinta por ciento (30%) del  total determinado a los noventa (90) días después de la promulgación de esta ley, un treinta por ciento (30%) del total antes del 30 de junio del 2001, y el restante cuarenta por ciento (40%) antes del 15 de diciembre del años 2001. Las personas jurídicas y negocios de único dueño que no se acogieron a esta amnistía fiscal, deberán pagar una multa equivalente a la diferencia entre el dos por ciento (2%) de los ingresos brutos de cada uno de los tres últimos ejercicios fiscales y la tasa  efectiva  sobre  los ingresos brutos pagadas en cada uno de esos años como Impuesto Sobre la Renta, si las fiscalizaciones a  ser ejecutadas por la  administración  Tributaria  determinan una  diferencia  mayor o  igual al  veinticinco por ciento (25%) entre los que pagaron por estos impuestos y lo que debieron haber pagado correctamente.  Párrafo  I.­ El  efecto  que  tenga el  proceso  de corrección  de los estados financieros de las personas jurídicas y de los negocios de único dueño sobre el valor de los activos de los mismos, no generara efecto fiscal u obligación tributaria con respecto a los impuestos establecidos en los títulos II,III y IV del Código Tributario. Párrafo II.­ Si la persona jurídica o el negocio de único dueño acepta y cumple con la obligación de pagar el uno por ciento (1%) de los ingresos brutos correspondientes al ejercicio fiscal del ano  1999, dicha persona jurídica  o  negocio  de  único  dueño quedara  exenta  de cualquier multa,  recargo o sanción de las establecidas en el titulo I del Código Tributario. Art. 3.­  amnistía  fiscal  para personas físicas, exceptuando negocios de único  dueño (transitorio). La diferencia entre el valor real del patrimonio neto voluntariamente declarado durante  el periodo habilitado para la corrección de patrimonio de personas físicas y el valor del patrimonio  neto  explicito  declarado,  será  gravado  con una  tasa  equivalente  a  la mitad del  uno  por ciento  (0.5%) siempre que dicha corrección se efectúe antes del 31 de mayo del 2001. El cincuenta por ciento  (50 %) de la nueva obligación impositiva se pagara el último día laborable del mes de junio del 2001, y el cincuenta por ciento (50%) restante el último día laborable del mes de diciembre del  2001. Párrafo  I.­ A partir  del  primero  (01) de enero  del  2001, la  Dirección  General de Impuestos Internos iniciara un operativo de valoración de patrimonios de las personas físicas, utilizando las informaciones obtenidas a través de acuerdos de intercambio de información fiscal firmados con otros países. La diferencia  entre  el  valor del  patrimonio estimado por la  Dirección General  de Impuestos Internos y el valor declarado durante el periodo de corrección, o del valor explicito en la  ultima  declaración  jurada,  si es que  el  contribuyente  no se  acogió  a  la  corrección,  se imputara  como renta neta imponible y será gravada con la tasa del veinticinco por ciento (25%). La nueva  obligación impositiva que se derive de esa diferencia deberá pagarse alos veinte (20) días de la  fecha de entrega de la notificación por parte de la Dirección General de Impuestos Internos. Párrafo  II.­ En  caso  de que la  persona  considere  que la  Dirección General  de Impuestos Internos ha realizado una estimación excesiva de su patrimonio neto, podrá solicitar a la Dirección  General de Impuestos Internos la reconsideración, lo cual deberá producirse en un plazo no mayor de veinte (20) días. Si la Dirección General de Impuestos Internos ratifica el valor determinado  inicialmente  y la  persona  mantuviese  su  posición de no aceptar el  valor determinado por la  Dirección General de Impuestos Internos, esta aplicara las disposiciones contenidas en el artículo 81 y siguientes del  titulo I del  Código  Tributario, sobre  procedimientos para ordenar medidas conservatorias. Párrafo III.­ El efecto que tenga el proceso de corrección de patrimonio sobre el valor de los activos de la persona no generara efecto fiscal u obligación tributaria con respecto a los impuestos establecidos con el titulo II del Código Tributario. Párrafo  IV.­ Si  la  persona  acepta  y cumple con la obligación de pagar la mitad del  uno  por ciento  (0.5  %) de la  diferencia  entre  el  valor del  patrimonio  declarado durante  el  periodo de corrección  y el  patrimonio  explicito  en la  declaración  jurada  del  ejercicio  del  años 1999, dicha persona queda exenta de cualquier multa, recargo o sanción de las establecidas en el titulo I del  Código Tributario. Artículo 4.­  Todo  contribuyente  o  responsable  que haya  regularizado  su  situación  fiscal  acogiéndose a las disposiciones de los artículos 2 y 3 de la presente ley deberá cumplir cabal y oportunamente con las obligaciones tributarias legalmente establecidas. En caso de que el mismo  cometa  algunos de los delitos tributarios, le  serán revertidos los beneficios que  le  hayan sido otorgados por la presente amnistía.  Artículo 5.­  Para la aplicación de esta ley regirán las disposiciones del Código Tributario.  Articulo 6.­ Quedan derogadas además cualquier otra  disposición que sea contraria a  lo que  estipula la ley. DADA en la Sala de Sesiones de la Cámara de Diputados, Palacio del Congreso Nacional, en Santo  Domingo  de Guzmán,  Distrito  Nacional,  capital  de la  Republica  Dominicana,  a  los diecinueve (19) días del mes de diciembre del año  dos mil (2000); año 157 de la Independencia y 138  de la  Restauración. (Firmados) Rafaela Alburquerque,  Presidenta;  Ambrosina  Savinol  Cáceres, Secretaria; Rafael Ángel Fran jul Troncoso, Secretario.  DADA en la Sala de Sesiones del Senado, Palacio del Congreso Nacional, en Santo Domingo  de Guzmán, Distrito Nacional, capital de la Republica Dominicana, a los nueve (9) días del mes de enero  del  año  dos mil uno (2001); año  157  de  la  Independencia y 138  de la  Restauración. (Firmados) Ramón  Alburquerque,  Presidente;  Ginette  Bournigal  de Jiménez, Secretaria;  Darío  Antonio Gómez Martínez, Secretario. HIPOLITO MEJIA Presidente de la República Dominicana En  el  ejercicio  de las atribuciones que  me confiere  el  articulo  55 de la  Constitución de la  Republica PROMULGA la presente ley y mando que sea publicada  en la Gaceta oficial, para su  conocimiento y cumplimiento. DADA en Santo Domingo de Guzmán, Distrito Nacional, capital de la Republica Dominicana, a los diecisiete (17) días del mes de enero del año dos mil uno (2001); año 157 de la Independencia y 138 de la Restauración. HIPOLITO MEJIA

LAW 3-04

Law whereby Art.367 and 375 of the Law amending Tax Code 11-92

Dominican Republic

CONSIDERING that recent economic difficulties have suffered Republic

Dominican caused by a banking crisis has caused a quasi-fiscal deficit of

considerable magnitude, which to be solved requires raising additional resources;

WHEREAS: The introduction of urgent tax measures necessary to

supplement the income required in the framework of negotiations with IMF

International;

WHEREAS for the State to deal with past deficits without neglecting the

basic needs of the Dominican people, it is necessary to take tax measures

will maintain a proper balance of income and expenses.

CONSIDERING that to achieve a sustainable fiscal balance it is required to establish a

reform consistent with the principles of equity, efficiency and fiscal transparency;

CONSIDERING that at the macroeconomic level the aim of a tax reform aims

increase revenues equitably to ensure sustainability in income

prosecutors;

WHEREAS within the alcoholic beverage sector there is great inequity

payment of the Selective Consumption Tax (ISC) between different taxable categories;

WHEREAS: international trends established for the collection of taxes

Special alcoholic beverages are based on the alcohol content of various types of

drinks;

WHEREAS: consumption trends snuff products in the country, make

required the adoption of a system that preserves the actual collections of the State;

CONSIDERING that this new system should enable the Dominican tax authorities

greater predictability of revenues for consumption concept products

tobacco;

CONSIDERING: That has significantly proliferated practice of counterfeit products

alcohol and snuff in our country, which seriously damages the domestic industry

It produces and sells these goods, while the consumption of these products represents a

serious danger to human health, especially for those who consume products

counterfeit alcohol, because in preparing them is not satisfied with the

minimum standards of manufacture;

WHEREAS this nefarious practice undermines not only public health but

significantly affects tax revenues that different concepts of

taxes are levied by the products of alcohol and snuff, while the

informality that is of such illegal practices make it impossible for the State may

monitor them, while the low price at which these products are marketed

Counterfeit promotes the displacement of demand for counterfeit products, so

is justified by the State promotes the establishment of rules and regulations that do more

effective combating those who engage in unscrupulous counterfeit products

alcohol and snuff for the purpose of seeking the final eradication of this evil.

SEEN: Law No.11-92, which establishes the Tax Code of the Dominican Republic, dated

May 16, 1992.

VISTA: The No.147-00 Law amending the Law No.11-92 establishing the Tax Code.

HAVING SEEN: Decree No. 79-03 dated 4 February 2003 that established the Regulation

for the implementation of Title IV of the Tax Code.

He HAS PASSED THE FOLLOWING LAW:

Article 1. Articles 367 and 375 of the Tax Code are amended, to pray for the

Following way:

"Article 367. The tax base shall be determined as follows:

a) In the case of assets transferred by the manufacturer, except those specified in the

b and c literal, the net price of the transfer resulting from the invoice or document

equivalent, extended by obligated to pay the tax people. It means

net price of the transfer, the value of the transaction, including related services

granted by the seller, such as packaging, freight, finance, invoiced or not

Separately, after deducting the following items:

1. Premiums and discounts granted in accordance with market practice.

2. Tax Debit tax transfer of goods and services.

The deduction of the items detailed above provided they proceed

correspond directly to taxable sales shape and appear as discrimination in the

respective invoice and are properly accounted for.

When the transfer of the encumbered asset is not onerous or in the case of consumer goods

He taxed own elaboration, it is taken as a basis for calculating tax, value

assigned by the responsible joint operations with similar or, failing that,

the market value.

b) When you try alcohol products, alcoholic drinks and beer will be taken as

the volume of taxable liters of pure alcohol each product or transferred

imported by the manufacturer or importer.

c) In the case of cigarettes, it is taken as taxable taxable income the amount of

packs of this transferred or imported by the manufacturer or importer product.

d) In the case of imported goods, the tax is levied on the total resulting from adding

defined for the application of tariff tax value, all tributes to the

import or in connection with it, except for the tax on transfer of goods and

services. In the case of imports of similar domestically produced products, is

will use the same tax base that is used for products manufactured

internally.

Paragraph I. For the purposes of the application of these taxes, when invoices or documents

do not express the market value of the tax authorities may estimate ex officio.

Paragraph II.- When the responsible tax sales made through people

that may be considered economically linked according to the criteria established by the

Regulation, unless proved otherwise, the tax will be paid on the higher price

sale obtained, and the tax administration also demand payment to those other

persons or companies, and subject them to compliance with all the provisions of this Title.

Paragraph III The excise tax paid at importation for the

raw materials and inputs derived products taxed alcohol with this tax,

as included in headings 22.07 and sub-headings 2208.20.30 and 2208.30.10 of the nomenclature of

Harmonized Commodity Description and Coding System, it may be deducted from

tax paid by the final products when being transferred. You can also

deduct the tax paid for the same raw and input materials when they are

removed or transferred from one center to another controlled production to be integrated into

final products subject to this tax. "

"Article 375. The assets whose transfer at the producer or manufacturer or importer is

taxed with this tax, as well as fees and specific amounts with which they are taxed

and whose implementation will take place in the Directorates-General Internal Revenue and Customs,

under Articles 369 and 385.

Paragraph II. This excise tax per liter of absolute alcohol is independent

any other taxes and not be considered as part of the price for the calculation of the base

assessment of any tribute or contribution.

Paragraph III. In the case of alcoholic drinks and beer, the tax amounts selective

to consume applicable to each fiscal year shall be those determined taking into account the

amounts indicated in the table described in paragraph I of Article 375 for the year

appropriate, adjusted for cumulative inflation rate reported by the Central Bank

Dominican Republic, based on the first year of application of this system (2004).

From 2009 the amounts determined for 2008 will remain tight

annually in line with inflation published by the Central Bank of the Dominican Republic.

Paragraph IV. The Directorate General of Internal Revenue shall request the Directorate General

Standards (DIGENOR), a categorization of alcohol products based on their content

absolute alcohol.

Paragraph V. In the case of snuff cigarettes containing a set amount

Specific Excise Tax Consumption per pack of cigarettes

Law No. 20497 (which provides exemption from wage No.13)

WHEREAS: Article 219 of the Labour Code (Law 1692 of May 29,

1992) states that "in no case the Christmas salary amount will be higher than five wages

legally established minimum ";

WHEREAS: Article 222 of the Labour Code states: "The Christmas salary not

is liable to tax, however, transfer or sale is not subject to tax on

rent";

WHEREAS the estab1ecido in Article 219, on Christmas salary, and

They Article 222 are totally contradictory, since the latter article states

Christmas that wages not be subject to taxation, while Article 219 limits

may amount to up the minimum wage.

VISTA 1692 Act, the Labour Code, in the part mentioned in Article 219 (ordinal the 1st.) And

Article 222.

He HAS PASSED THE FOLLOWING LAW:

ARTICLE UNICO: it is added a paragraph to Article 222, so that henceforth read:

PARAGRAPH: This provision applies even if the amount paid is more than five (5) wages

legally established minimum.

GIVEN in the Hall of Sessions of the Chamber of Deputies, National Congress, in Santo

Domingo, National District, Capital of the Dominican Republic, on the twenty (22)

day of July of the year in 1997, the year 154 of Independence and 134

Restoration.

Hector Rafael Peguero Méndez

President

Lorenzo Valdez Carrasco July Ant. Altagracia Guzman

Secretary Secretary

GIVEN in the Hall of Sessions of the Senate, National Congress, in Santo Domingo

Guzman, National District, Capital of the Dominican Republic, fourteen (14) days of

October of the year in 1997, the year 154 of Independence and 135

Restoration.

Hannibal Virgilio Peña Castillo

Acting Vice President

Enrique Pujals

Secretary

Antonio Felix Perez

Secretary AdHoc

Law No. 557-05 on Tax Reform and amending Acts Nos 11-92 of 1992.; 18-88

1988; 4027 1955; 112-00 and 146-00 of 2000.

THE NATIONAL CONGRESS

In the Name of the Republic

Law No. 557-05

 WHEREAS under the Stand-by Agreement signed between the government

Dominican and International Monetary Fund, one of the commitments implies

making several structural reforms, within which the looms large

Tax Reform;

 WHEREAS addition, the Dominican Republic is

currently it is undergoing a process of global liberalization and trade integration, highlighting

within that process the conclusion of the Free Trade Agreement with the United States and

Central America;

 WHEREAS as a result of the implementation of the Treaty

Free Trade Agreement with the United States and the Central American countries, known

as DR-CAFTA, offsetting the revenue losses associated with becomes necessary

this treaty, like the elimination of the exchange commission and other income disappear

as a result of this process;

 WHEREAS, in this context, customs revenue experience

a significant reduction, so it is necessary to strengthen and increase collections

internal sources;

 CONSIDERING that to achieve the objectives is essential

the adoption of new tax figures and modification of others, in order to improve

auditing and collection capacity of the tax administration in order to promote

decreased levels of evasion and increase revenue from these sources.

 Having regard to the Law No.11-92 of May 16, 1992, which creates the Tax Code;

 Having regard to the No.112-00 Law of 29 November 2000, which establishes a tax

the consumption of fossil fuels and oil products;

 VISTA Law No.146-00 of December 27, 2000, on Reform

Tariff and Fiscal Compensation;

 Having regard to the No.147-00 Act of December 27, 2000, on Tax Reform;

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________________________________________________________________________

 Having regard to the Law No.12-01 of 17 January 2001 amending Laws

Tariff Reform and Tax Reform Nos.146-00 and 147-00, respectively, both 27

December 2000, which, in turn, modify the Law 11-92 of May 11, 1992

(Tax Code) and 14-93, of 26 August 1993 (HS Code) and amendments thereto;

 HAVING SEEN Law No.3-04, of 9 January 2004 amending Articles 367 and 375

the Tax Code;

 Having regard to the Law No.92-04 of January 27, 2004, which creates a Program

Exceptional Risk Prevention for Financial Institutions;

 Having regard to the No.288-04 Act of September 28, 2004, on Tax Reform;

 Having regard to the Law No.18-88 of January 5, 1988, which establishes an annual tax

called "Tax Sumptuary Housing and Urban Lots".

He HAS PASSED THE FOLLOWING LAW:

 ARTICLE 1 paragraph 2.1 of paragraph VIII of letter e) are replaced and the literal k)

Article 287 of the Tax Code, as amended by the Act No.288-04, September 28

2004, to say as follows:

 "Article 287, paragraph VIII. Joint Accounts Asset.

(2.1) Any amount spent during the fiscal year to repair the goods

the account shall be allowed as a deduction for that year ";

"K) Losses: Losses suffer damages legal persons in their exercises

economic be deductible from the profits obtained in the exercises

Subsequent to the immediate losses, without this compensation

it may extend beyond five (5) years, in accordance with the

following rules:

1) In no case shall be deductible in the current period or future,

losses from other entities with which the

taxpayer has made any reorganization or

those generated in non-deductible expenses.

2) Legal persons may only deduct your losses at a rate of

twenty percent (20%) of the total amount thereof per year.

In the fourth (4th.) Year, that twenty percent (20%) will be deductible

only up to eighty percent (80%) of net income

taxable for that year. In the fifth (5th.) Year,

This maximum is seventy percent (70%) of net income

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________________________________________________________________________

taxable. The portion of twenty percent (20%) of losses

deducted in a year it may not be deducted in later years or

will cause any reimbursement by the state. deductions

may be made only when the affidavit

the income tax. "

Paragraph I. are exempted from this provision legal persons

submit losses in the statement of income tax of its

first fiscal year. The losses were generated at the first exercise

tax may be offset up to 100% in the second fiscal year. In

If they could not be fully compensated, the remaining credit

It will be compensated according to the mechanism set out in this literal.

Paragraph II: Taxpayers who file their annual tax losses

income tax may request the total or partial relief from

limits percentages of losses and net taxable income established in the

literal present. The Tax Administration may accept this request provided

that, in his view, there are reasons of force majeure or extraordinary nature that

justify the extension of the percentage of losses liable to be

offset. "

 Article 2. paragraph 2.2 of subsection VIII Repealed literal e)

Article 287 of the Tax Code.

 Article 3. paragraphs are amended and paragraph 5 is added and

paragraph II, Article 296 of the Tax Code, as amended by Law 288-04, 28

September 2004, to say as follows:

 "Article 296. TAX RATE OF INDIVIDUALS

1. Income until RD $ 257,280.00, exempt;

2. The surplus RD $ 257,280.01 to $ 385,920.00 to RD, 15%;

3. The surplus RD $ 385,920.01 $ 536,000.00 to RD, 20%;

4. The surplus of RD $ 536,000.01 to $ 900,000.00 RD, 25%;

5. The surplus of RD $ 900,000.01 on, 30%.

 "Paragraph II The maximum marginal rate of thirty percent (30%)

established in this Article shall be reduced annually until it reaches the

Twenty-five percent (25%) of net taxable income, applying the following

calendar:

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________________________________________________________________________

1) For fiscal year 2007, twenty-nine percent (29%)

2) For fiscal year 2008, twenty-seven percent (27%)

3) For fiscal year 2009, twenty-five percent (25%). "

 Article 4. Article 297 of the Tax Code, as amended hereby amended by

Law 147-00, dated December 27, 2000, to read as follows:

 "Article 297. TAX RATE OF CORPORATIONS

 Legal persons domiciled in the country paid for the fiscal year

2006, thirty percent (30%) on their net taxable income. For the purposes of the

application of the levy referred to in this article, are considered as persons

legal:

a) capital companies;

b) Public companies for their income of a commercial nature and

other entities referred to in Article 299 of this title, by

different to those declared exempt income;

c) Undivided estates;

d) partnerships;

e) Joint ventures;

f) Irregular societies;

g) Any other form of organization not expressly provided whose

feature is obtaining profits or benefits, Unreported

expressly exempt from this tax.

 "Paragraph I. The rate of thirty percent (30%) established in this

Article will be reduced annually up to twenty-five percent (25%) of the

net income, using the following schedule:

1) For fiscal year 2007, twenty-nine percent (29%)

2) For fiscal year 2008, twenty-seven percent (27%)

3) For fiscal year 2009, twenty-five percent (25%)

 "Paragraph II The rate set forth in the preceding paragraph apply to all

articles establishing rates in Title II, except for sections 306 and 309

the Tax Code ".

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 Article 5. Article 306 of the Tax Code, as amended hereby amended by

No.147-00 laws of December 27, 2000, and No.92-04 of January 27, 2004, to read

as follows:

 "Article 306.- interest paid or credited ABROAD

 "Whoever pays or credits into account interests of Dominican sources

from loans contracted with foreign credit institutions,

They must withhold and pay to the Administration as single payment and

definitive tax 10% of these interests. "

 ARTICLE 6. The first part is amended and paragraphs a), b), c), d) and e)

paragraph I of Article 309. The in-fine part of Article 309 was also amended the Code

Tax, as amended by the No.147-00 Laws of December 27, 2000, No.12-01, the

January 17, 2001, and No.288-04, of 28 September 2004, to say the

Following way:

 "ARTICLE 309. DESIGNATION OF RETENTION AGENTS

 "The Tax Administration may establish that legal persons

act as withholding agents when paid or credited into account other

legal persons not tax exempt income of up to a limit of retention

one percent (1%) of the total amount paid or credited. The administration

Tax will regulate the characteristics that must meet the withholding agent. The

same rule provide that all qualified as high taxpayer

compliance in the payment of their tax obligations, on that basis, be

He designated retention agent other legal entities, will in turn free

retention of one percent (1%) of the rents that are paid or

credited to account by other legal entities. The amounts withheld under

of this paragraph shall be compensable as payment on account against any

or advance tax payments according to the procedure established in this law.

 "Public entities act as withholding agents when they pay

or credited into account natural persons, undivided estates and people

legal and other entities not exempt from tax, the amounts for

concepts and ways established by the regulations.

 "Legal entities and single owner businesses should act as

withholding agents when they pay or credit account to individuals and

undivided, as well as other entities not exempt from the tax, except to

legal entities, the amounts for the concepts and forms established by the

regulation.

 "These deductions will be considered a down payment or final payment,

as appropriate, and will proceed in the case of subjects resident, established or

domiciled in the country.

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 "Paragraph I. The retention provided in this article will be in the

percentages of gross income listed below:

a) 10% of the amounts paid or credited into account concept

rental or lease of any movable or

property, as payment on account;

b) 10% of the fees, commissions and other remuneration and payments

for the provision of services generally provided by individuals,

unexecuted as employees, whose provision requires the

direct intervention of human resources; as a payment on account;

c) 15% on prizes or winnings from lotteries, fracatanes, lotuses,

quizz lotus, electronic games, bingo, horse racing, benches

bets, casinos and any type of prize offered through

promotional or advertising campaigns, as final payment;

d) 5% on payments made by the state and its agencies,

including state enterprises and decentralized agencies and

self-employed, individuals and legal entities, for the acquisition of goods and

services in general, not in a dependent relationship with

as payment on account;

e) 10% for any other income not contemplated in

these provisions; as payment on account.

 "Dividends and interest received from financial institutions

regulated by the monetary authorities; as well as the National Development Bank

Housing and Production Associations Savings and Loan, the

fund managers pension defined in the Act No.87-01 of 9

May 2001 creating the Dominican Social Security System and Funds

Pension that these administered, the market intermediary companies

securities, investment fund managers and securitization companies

No.19-00 defined in the Act of May 8, 2000, they are excluded from the

preceding provisions of this Article, without prejudice to the provisions of

Article 308 of this Code. "

 Article 7. Article 314 of the Tax Code, as amended hereby amended by

No.147-00 laws of December 27, 2000, No.12-01, of January 17, 2001, and No.288-04,

of September 28, 2004, to read as follows:

 "ARTICLE 314. PAYMENT OF ADVANCES

"Since fiscal 2006, all taxpayers Tax

Income that are legal persons and single owner businesses whose effective rate

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taxation is less than or equal to 1.5% (one point five percent), they will pay their

the advances on the basis of twelve equal monthly installments,

resulting from applying 1.5% to the gross income declared in fiscal year

previous. Legal entities and single owner businesses whose effective rate

Taxation is greater than 1.5% (one point five percent), pay

monthly in advance twelfth of the tax paid on their

previous statement.

"Paragraph I. In the case of individuals and undivided estates the

Advances shall be calculated on the basis of 100% of the tax paid on their

previous year and paid in the months following percentages: 50% six months;

ninth month and twelfth month 30% 20%.

"Paragraph II the amount of gross income or tax paid

basis of which are calculated, as the case established in this Article, of

the amounts payable by way of advances, balances are deducted in favor

contained in the declaration to proceed, if it had applied for

compensation or reimbursement.

"Paragraph III If at the end of the fiscal period to which they relate advances

thus calculated, a balance result for the taxpayer as a result of excess

the payment of advances on Income Tax paid, the taxpayer may

offset this balance with the tax on the assets established in the Articles of

401 to 408 of the Tax Code added by Section 18 of this Act, without prejudice

the taxpayer's right to seek reimbursement in accordance with the provisions

for these purposes by this Code.

"Paragraph IV Taxpayers who demonstrate a significant reduction

of their income in the current period may request, at least fifteen (15) days

before maturity, total or partial exemption to make the advance provided for in

this article. The Tax Administration may accept this request provided that,

his view, there are reasons of force majeure or extraordinary nature justifying

the impossibility of making such payments.

"Paragraph V. Individuals will not pay the advance fixed in

this article when all of its income tax paid

income by way of retention. When only part of the income of the person

physics has paid the tax by way of retention, payment will be applied

on the portion of tax that it has not been subject to retention.

"Paragraph VI In the case of legal persons referred to in Article 297,

whose income comes from commissions or markups

regulated by the state, the basis for calculating advances will be the total of their

gross revenue from commissions or margins established by

the competent authorities. Similarly, the dedicated intermediary

exclusively to sales of goods of others, they will pay an advance of one point

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five percent (1.5%) of this Article, calculated on the total of your

Revenue from commissions obtained in that activity.

"Paragraph VII.- not pay the deposit of one point five percent (1.5%),

established in this Article natural persons who develop

commercial and industrial activities, provided that the annual income from

such activities is equal to or less than five million pesos (RD $ 5,000,000.00).

These individuals are welcome to special regime will be established in the

Regulation implementing the income tax. "

 Article 8. Article 342 of the Tax Code is amended to read the

follows:

 "ARTICLE 342.- ZERO RATE FOR EXPORTERS

 "There are taxed at zero rate the goods exported. The

exporters themselves are entitled to deduct any other obligation

tax, the value of tax charged when acquiring goods and services

intended for export activity. If there remain a balance in favor of the exporter

this will be returned by the DGII, in the manner prescribed in this code and

regulations.

 "Paragraph In case a company does not export its entire

production, when you can not be discriminated extent to which services

intended deduct tax have been destined for export activity,

such deduction shall be made in the appropriate proportion to the amount of their

exports on total operations in the period in question. The

Directorate General of Internal Revenue can check the proportion of the

production exported with shipping documents deposited by the

exporter in the Directorate General of Customs, among other methods. "

 Article 9. Table exemptions numeral 1) paragraph II have been amended and

Article 343 of the Tax Code, as amended by Laws No.147-00, December 27

2000, and No.12-01 of January 17, 2001, to say as follows: "

 "Article 343. EXEMPT GOODS

1) The transfer and import of goods listed

Below they are exempt from tax provided for in Article 335.

In the case of an exempt asset is part of a sub-item of

Tariff Schedule of the Dominican Republic to include other

goods, the latter will not be considered exempt.

"Paragraph II are exempt from this tax and import

acquisition in the local market of raw materials, packaging materials, supplies,

machinery, equipment and spare parts for the manufacture of medicine for use

human and animal, when they are acquired by the laboratories

pharmaceuticals ".

 ARTICLE 10 paragraphs III and IV of Article 343 of the Code are repealed

Tax, as amended by No.147-00 Act of December 27, 2000.

 ARTICLE 11 paragraph 5 of Article 344 of the Tax Code is amended

No.147-00 amended by the Act of December 27, 2000, to read as follows

way:

 "ARTICLE 344. EXEMPT SERVICES.

5) Services of land transportation of people and cargo services

of stevedoring, I bring closer, towage, pilotage, loading and unloading

provided at ports and airports;

 Article 12. Article 345 of the Tax Code, as amended hereby amended by

No.147-00 law of December 27, 2000, to read as follows:

"ARTICLE 345. GROSS TAX

The tax period is sixteen percent (16%) of the value of each

taxable transfer and / or the service performed on it. "

 Article 13. Article 350 of the Tax Code, as amended hereby amended by

No.147-00 law of December 27, 2000, to read as follows:

 "ARTICLE 350. TAX DEDUCTIONS EXCEEDING THE ROUGH

 "When the total tax deductible by the taxpayer out

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higher than the gross tax, the resulting difference will be transferred, as a deduction,

the following monthly periods; this situation does not relieve the taxpayer of the

obligation to submit his affidavit as required under the regulations.

"Exporters reflect tax credits advance in goods and

services purchased for its production process, have the right to request reimbursement

or compensation thereof within six (6) months.

 "For compensation or reimbursement of credit balances indicated in

this Article, the Tax Administration has a period of two (2) months

counted from the date of receipt of the request, in order to decide on

the same. If in the indicated period of two (2) months the Tax Administration has not

issued its decision on reimbursement or compensation requested, the silence of the

Administration have the same effect that the authorization and the taxpayer

compensation may be applied against any tax, according to the procedure

that indicated below. The application shall be made first to the body of the

Where credit administration originated.

 "The taxpayer will perform the compensation presenting Administration

Tax affidavit and / or tax assessment against which

offset, specifying the balance in favor and annexing copy of the application received

or reliable information on the time elapsed from the date of receipt of

application. In addition, copying or reliable information be attached on the

affidavit and copy the balance was generated or reliable information about

the affidavit of post-filing application

compensation. Should compensation be made against any

tax liability arising to the Directorate General of Customs (DGA), the subject

concomitantly person must notify the Directorate General of Taxes

Internal (DGII) compensation. The taxpayer can never compensate for the

credit against a tax withheld on behalf of another taxpayer. The Tax Administration may

regulate the procedure described above compensation, to

simplify it or do it electronically, always respecting deadlines

mentioned in this article, the automatic nature of compensation to the

administrative silence, the requirement to initially apply to the organ in which

credit and power to compensate originated from any other obligation

tax, including ITBIS and excise taxes, with the

except for taxes withheld by third parties.

 "The same treatment will be granted to the producers of exempted goods

Tax Transfers of Industrialized Goods and Services.

 "The fact that compensation or refund occurs not

It affects any powers of inspection, supervision and

Administration determination on credit balances, overpayments or

excess, nor be construed as a waiver of its power

sanctioning culpable determine if differences incriminate the

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responsibility of the exporter or producer of exempt property ".

 ARTICLE 14.- paragraph III of Article 367 of the Tax Code is amended

No.147-00 amended by the Laws of 27 December 2000, and No.3-04, January 9

2004, and a paragraph IV is added to that article, to read as follows:

"ARTICLE 367.-

"Paragraph III The Excise Tax paid at the time of

import raw materials and inputs derived products

alcohol and cigarettes subject to this tax, included in items

22.07 and subheadings 2208.20.30, 2208.30.10 and, as well as tariff heading

24.03 of the Harmonized System Description and Coding

Goods may be deducted from the tax paid by the final products to

time of transfer. It will also be evident in the case of alcohol the

tax paid for the same raw materials and supplies when they are

removed or transferred from a production center to another to be controlled

integrated into final products subject to this tax. "

 "Paragraph IV Exporters reflect advance tax credits

in the procurement of goods that are part of the production process, they have the right

to seek reimbursement or compensation thereof within six (6)

months. For compensation or reimbursement of credit balances, the Administration

Tax has a period of two (2) months from the date of

application, in order to complete the verification procedure and decide on the

same. If in the indicated period of two (2) months the Tax Administration has not

issued its decision on reimbursement or compensation requested, the silence of the

Administration have the same effect that the authorization and the taxpayer

compensation may be applied against any tax liability, according to

terms and the procedure referred to in Article 350 thereof. The fact that

produce compensation or reimbursement does not undermine in any way the

powers of inspection, control and determination of the Administration

balances in favor, undue or excess payments, nor be construed

a waiver of its power to impose penalties in case of determining differences

culpable to incriminate the exporter's responsibility ".

 ARTICLE 15.- the amounts stated in the table are modified equity portion

Article 375 of the Tax Code, as amended by Laws No.147-00, December 27

2000, No.3-04, of January 9, 2004, and No.288-04, 28 September 2004.

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 ARTICLE V 19.- A new title is added to the Tax Code and will

integrated as follows:

"TITLE V

TAX ASSETS

 "ARTICLE 401. SUBJECT OF TAX. It establishes a tax

per annum on the assets of legal entities or individuals with business only

owner.

 "ARTICLE 402. TAXABLE ASSETS. For purposes of this tax

taxable asset means the total value of assets, including so

expresses the properties contained in the balance sheet of the taxpayer, not

adjusted for inflation and then applied the deduction for depreciation,

amortization and allowances for doubtful accounts. Excepted from the base

This tax tax equity investments in other companies,

land located in rural properties by type,

farms and developed taxes or advances.

 "ARTICLE 403. TAXABLE ASSETS FOR INSTITUTIONS

FINANCIAL AND ELECTRICITY COMPANIES. Intermediation Entities

Financial, defined in the Monetary and Financial Law 183-02, December 3

2002; and the National Bank for Housing Development and Production,

Administrators of Pension Funds defined in the Act No.87-01 of 9

May 2001 creating the Dominican Social Security System and funds

pensions they manage; intermediary companies market

securities, investment fund managers and securitization companies

19-2000 defined in the Act of May 8, 2000; as well as companies

power generation, transmission and distribution defined in the General Law

Electricity No.125-01, of July 26, 2001, will pay this tax

basis of their total assets, net of depreciation, as it appears in your

balance sheet.

 "ARTICLE 404. TASA. The tax rate will be one percent (1%)

year, calculated on the total amount of taxable assets.

 "ARTICLE 405. LIQUIDATION AND PAYMENT. The settlement of this tax

shall be made in the same affidavit that Income Tax

present the taxpayer. Payment of tax, where applicable, will be made in

two installments, the first in the same deadline for payment

income tax and the second within six (6) months from

the maturity of the first installment.

 "Paragraph I. The failure to file the affidavit and payment

the deadline shall be punished according to the provisions of title

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I, the Tax Code.

 "Paragraph II In case of omission of information concerning assets in

presentation of the affidavit, the DGII estimate of the amount of active job

taxable, it shall recover the tax and apply the penalties provided for in

Title I of the Tax Code.

 "Paragraph III Where the tax authorities had

It extended the date for payment of income tax, shall be considered

this tax automatically extended for the same term. "

 "ARTICLE 406.- EXEMPTIONS. They are exempt from this tax

legal persons, pursuant to this Code, special laws or

contracts approved by Congress, are fully exempt

Income Tax.

 "Paragraph I. The regulations defined by the Internal Revenue investments and

capital intensive, classified by type of business, or those investments

which by the nature of its activity have an installation cycle, production and

start more operations than one (1) year, or not made by new companies,

may benefit from a temporary exclusion of its assets in the tax base

This tax, provided they are new or reputedly capital

intensive. The company must demonstrate that its assets qualify as new or

They come from a capital-intensive investment according to the criteria defined

in regulation.

 "Paragraph II companies seeking to benefit from the exclusion of

that is, they must apply to the DGII at least three (3) months before the

scheduled for filing your annual tax return date. The Tax Administration may

deny this temporary exemption reasoned decision, which is likely to

be appealed to the Tax Dispute Court within fifteen (15) days

from the date of notification to the taxpayer or responsible. The resolution

granting the temporary exemption will determine the length of it, which will be

up to three (3) years, extendable when there are justified reasons,

in the opinion of the Tax Administration. This excludes cases in which

ownership of assets has been transferred under mergers or have been

transferred by one or other legal or natural persons who have enjoyed full or

part of this exemption.

 "Paragraph III Taxpayers filing your tax losses

income tax of the same exercise, may request a temporary exemption

tax assets. The Tax Administration may accept this request

provided that, in his view, there are reasons of force majeure or extraordinary nature

to justify the failure to make such payment.

 "ARTICLE 407. CREDIT AGAINST THE INCOME TAX.

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The amount paid in respect of this tax is regarded as a credit against

the corresponding income tax for fiscal year declared.

 "Paragraph I. If the amount paid by way of income tax

it is not less than the tax assets to pay, shall be considered extinguished

the payment obligation of the latter.

 "Paragraph II.- In the event that after applying the credit concerns

This article existed a difference to be paid for tax

assets, as the amount it exceeds the amount of tax on income,

taxpayer will pay the difference to the Treasury in two installments provided for in

Article 405 of the Code, divided equally.

 "Article 408 (Transitory) .- The taxpayers of this tax

whose fiscal lockup occurs in December 2005, they must pay, in the year

2006, the annual tax Real Estate and Urban Land Plots

Edified, established in the Law No.18-88 of February 5, 1988, and

modifications, according to the procedure of valuation of commercial property

No.288-04 established in the Act of 28 September 2004. The amount of

tax paid by this concept is regarded as a credit against tax

on for the fiscal 2006 period assets whose return must

presented in 2007. "

 ARTICLE 20. Articles 401, 402, 403 and 404 of the Code are renumbered

Tax as Articles 409, 410, 411 and 412.

 ARTICLE 21.- are amended paragraphs a) and b) of Article 2, and adds a

paragraph to Article 3 of Law No.18-88 of February 5, 1988, Tax Housing

Sumptuary and Urban Lots, as amended by Law No.288-04, September 28

2004 on Tax Reform, to say as follows:

• are amended paragraphs a) and b) of Article 2, to govern as follows:

a) Those for housing and commercial activities belonging

to individuals whose value including the site where they are

builded exceeds five million pesos, adjusted annually

inflation;

b) Urban Lots ".

• A paragraph is added to Article 3.

"Paragraph shall also be exempted from this tax housing and solar

belonging to taxpayers that are legal entities or individuals with business

single owner, subject to the tax on assets provided in Articles 401 and

following the Tax Code ".

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 ARTICLE 22.- The registration or registration of all motor vehicles,

excluding agricultural tractors, newly entering the country and the consequent

issuance of the first plate and issuance of certificate of ownership (registration) by the DGII

will pay a tax ad valorem seventeen percent (17%) on the CIF value of the vehicle. "

 PARAGRAPH I. The National Treasury shall record revenues

this tax in revenues for the Wealth Tax.

 PARAGRAPH II is exempt from payment of 17% on the CIF value of

imports of motor vehicles in the share capital of this article of this law and payment

10% set in Article 7 of Law No.4027, of 14 January 1955 on the value

transfer of fulfilled within two years (2) that establishes the Law No.57-96, 6

December 1996.

 ARTICLE 23. In addition to the tax on fossil fuels and derivatives

No.112-00 oil provisions of the Act of 29 November 2000, provides a tax

Selective 13% ad valorem on domestic consumption of these fossil fuels and the resulting

Petroleum.

 PARAGRAPH I. The taxable amount of this tax is the selling price fixed by

the Ministry of Industry and Trade, through resolutions enacted for the purpose

weekly, less taxes, distribution margins and detail and transportation commission.

 PARAGRAPH II This tax must be withheld and paid to the DGII by

individuals or processing companies, refiners, distributors Supply or products

taxed or those that are self-sufficient directly from them.

 PARAGRAPH III The obligation to pay this tax generated by the first

internal transfer, sale or purchase for self-supply of the taxed products. The pay

It must be made on the first working day of each week, based on the fixed prices week

above by the Ministry of Industry and Trade.

 PARAGRAPH IV The DGII established through regulations the

procedure for payment of this tax for companies that make direct purchases for

self-supply.

 Paragraph V. Fossil fuels and oil derivatives intended

power generation to be used by power generating companies

sell power to the interconnected national grid will be exempt from this tax.

 PARAGRAPH VI Tax Crime was punished as use for purposes other than

which originate the exemption provided in this Act on fossil fuels and derivatives

Petroleum.

 ARTICLE 24.- The assets classified under tariff subheadings

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described below will be taxed at rate "0" in the tariff schedule established in the

Annex one of the No.146-00 Act of December 27, 2000, once it enters into force of the Treaty of

Central American Free Trade and the United States of America (DR-CAFTA for short

English).

Alfredo Pacheco Osoria,

President

Severina Gil Carreras, Josefina Alt. Mars Duran,

  Secretary Secretary

  GIVEN in the Hall of Sessions of the Senate, National Congress, in Santo

Domingo, National District, Capital of the Dominican Republic, eight (8) days

December two thousand and five (2005); 162 years of Independence and 143

Restoration.

Andres Bautista Garcia,

President

Enriquillo Reyes Ramirez, Pedro José Alegría Soto,

  Secretary. Secretary.

Note: Version before publication