Because the Dominican Republic is part of the Inclusive Framework of the Base Erosion and Profit Shifting Project of the Organisation for Economic Co-operation and Development, taxpayers should expect changes to the Dominican Republic's domestic laws and tax policy.

The Dominican Republic joined the Inclusive Framework of the Base Erosion and Profit Shifting (BEPS) Project of the Organisation for Economic Co-operation and Development (OECD) on October 8, 2018.

Background

On October 5, 2015, the OECD released final reports on all 15 focus areas in its Action Plan on BEPS to equip governments with domestic and international instruments to ensure that profits are taxed where economic activities generate them.

To implement the actions efficiently and coherently, the OECD established an Inclusive Framework to which all interested jurisdictions were invited to participate.

The jurisdictions joining this Inclusive Framework participate as BEPS Associates in the Committee of Fiscal Affaires (CFA) of the OECD and its auxiliary entities. Currently, 119 jurisdictions (including the Dominican Republic) have joined the Inclusive Framework, all of which will have a chance to intervene on equal terms in all of the CFA's meetings and its work team on the BEPS project.

In addition, member jurisdictions of the Inclusive Framework may work alongside the OECD and the G20 countries on developing standards on BEPS-related issues and implementing monitoring processes.

Consequences of joining the Inclusive Framework

As a result of joining the Inclusive Framework, the Dominican Republic commits to implementing the four minimum BEPS standards: (i) harmful tax practices (Action 5), (ii) treaty abuse (Action 6), (iii) country-by-country reporting (Action 13), and (iv) dispute resolution (Action 14). To implement the four minimum BEPS standards, the Dominican Republic is expected to make changes to its domestic laws and tax policy in the near future.

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