provisionally-largely-compliant

Dominican Republic

To see the determinations and rating of all published reports click here.

Overall rating is Provisionally Largely Compliant

Dominican Republic has been reviewed under the fast-track procedures and assigned provisional overall rating. Dominican Republic will be scheduled to undergo a full review under the strengthened 2016 Terms of Reference in the near future.

Table of Determinations and Ratings of the Phase 2 Review

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is not in place.   Joint stock companies, which represent approximately 23% of all companies in the Dominican Republic, may issue bearer shares. Although there are obligations in certain cases under the AML Law and the Tax Code for the reporting of ownership information in the case of a transfer of a bearer share, these reporting mechanisms do not sufficiently ensure that the owners of such shares can be identified in all cases.  The Dominican Republic should ensure that appropriate reporting measures are in place to effectively ensure that owners of bearer shares can be identified in all cases and that for SAs who may have issued bearer shares prior to the transformation process, that a mechanism is put in place whereby those shareholders can also be identified. 
Phase 2 Rating Factors Recommendations
Non-Compliant.  In those cases where companies and partnerships have not renewed their business certificate with the Mercantile Registrar or proceeded to register with DGII, the Dominican Republic does not have an effective oversight program in place to ensure compliance with ownership and identity information by those entities.  The Dominican Republic should put in place an effective oversight program to ensure the compliance with ownership and identity information obligations by all relevant entities and arrangements and that in cases of non-compliance, penalties are being enforced in practice. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Largely Compliant.  In those cases where entities have not renewed their business certificate with the Mercantile Registrar or proceeded to register with DGII, the Dominican Republic does not have an effective oversight program in place to ensure compliance by those entities with the obligations to maintain accounting information.  The Dominican Republic should put in place an effective oversight program to ensure the compliance of the obligations to maintain accounting information for all entities and should exercise its enforcement powers as appropriate to ensure that such information is available in practice. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The legal procedure for accessing detailed banking information entails a number of steps and uncertain timelines which may impede the effective exchange of information, in particular, in urgent cases.  The Dominican Republic is recommended to ensure that the judicial procedure to access banking information does not unduly delay or prevent effective exchange of information, in particular, in urgent cases. 
Phase 2 Rating Factors Recommendations
Partially Compliant.  Over the review period, the Dominican Republic was unable to provide requested banking information in two cases. As a result, the Dominican Republic implemented a new process which requires the competent authority to obtain a court order to access banking information from the Banking Superintendent. While this process has been utilised to successfully gather information for three EOI requests received during the review period, the full effectiveness of this process to access information for an EOI request could not be tested in practice. Further, the extent to which the banking information being requested pursuant to an EOI request will satisfy the requirements for obtaining the court order in all cases is unclear.  The Dominican Republic should clarify its process to access banking information to ensure that it can be used to access banking information pursuant to an EOI request in all cases. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     The Dominican Republic should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.     
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.  Over the review period, the Dominican Republic was able to fully answer EOI requests in less than 90 days in 37% of all cases and in 27% of all cases, it took almost one year to provide the requested information.  The Dominican Republic should ensure that its authorities establish appropriate internal procedures to be able to respond to EOI requests in a timely manner. 
In those cases where it did not respond in less than 90 days, the Dominican Republic did not systematically provide updates to the requesting jurisdiction on the status of requests.  The Dominican Republic should provide status updates to its EOI partners within 90 days where relevant. 

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.