Transfer Pricing in the Dominican Republic: The DIOR Filing You May Owe Even With No Transactions

Here is the detail that catches multinationals off guard in the Dominican Republic: a company can owe a transfer pricing filing even in a year when it transacted nothing with its affiliates. Since Decree 256-21, any taxpayer that meets one of the relatedness tests must file the informative return, the DIOR, whether or not related-party operations took place.

The regime has come a long way from its origins. The tax authority’s 2011 general norm first ordered that transactions between related parties be priced as independent parties would have priced them, the arm’s length principle. Law 253-12 then rewrote Article 281 of the Tax Code and added Articles 281 bis, ter and quáter, giving the principle statutory rank. The rulebook today is Decree 78-14 of 2014, which expressly repealed the 2011 norm, as amended by Decree 256-21 and developed by General Norm 08-2021.

The scope is broader than corporate groups. The rules reach Dominican residents transacting with related parties abroad or at home, with parties in low-tax jurisdictions or preferential regimes, related or not, and with affiliates operating under the free zone regime. Relatedness itself goes beyond shareholding: exclusive distribution arrangements and de facto control can create it.

The obligations stack in tiers. The DIOR is filed annually together with the income tax return (IR-2). A transfer pricing study, the local file supporting the pricing, must be available when the DIOR is filed. Larger structures add a master file, and multinational groups with consolidated revenue above roughly RD$38.8 billion must file a country-by-country report. Non-compliance is expensive: formal-duty fines that can triple, plus a penalty of 0.25% of declared income, before any price adjustment, and adjustments carry their own sanctions.

The practical rule: identify your related parties before year-end, not at filing time. Comparables take weeks to build, and a DIOR filed without a study behind it is an audit invitation.

Our transfer pricing and tax lawyers in the Dominican Republic prepare DIOR filings, studies and defense files for local subsidiaries of foreign groups. If your fiscal year is closing, the window to document is now.

Do you want more information about our Transfer Pricing Regulation services in Dominican Republic? Contact Us.

ABOUT THE AUTHOR: Maria Arthur Rodger is a Partner leading the Private Client, Successions and Tax areas at Arthur & Castillo Advisers and Consultants in the Dominican Republic. She specializes in private client, successions, tax, real estate valuation and advisory (Master in Tax and Finance Studies from Georgetown University in Washington, D.C. & Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience. She is also a Certified Public Accountant (CPA), Certified Valuator, Business Bankruptcy Expert and English and Spanish Interpreter.

Email: marthur@aclaw.com

Disclaimer: This publication is not intended to provide advice or suggest a guaranteed outcome as individual situations will differ and the situation may have changed since publication. For specific advice on the information provided and related topics, please contact the author.

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