September 1, 2022
Dominican Republic's General Directorate of Internal Taxes establishes guidelines for applying mutual agreement procedure
On August 30, 2022, the General Directorate of Internal Taxes of the Dominican Republic issued General Norm 10-2022, establishing the guidelines for applying the mutual agreement procedure (MAP) in double tax treaties (DTTs).
General Norm 10-2022 applies to taxpayers that request access to the MAP established in the DTTs signed by the Dominican Republic (DR). Persons can submit their case to their country's corresponding competent authority (CA) or the other country's CA if they (i) are residents in the DR, as defined by the DTT, and (ii) believe the measures adopted by the CA of one of the two countries that is a party to the DTT may result in taxation that does not accord with the DTT's provisions.
The initial request to use the MAP must, among other things, (i) identify the article, interpretation and agreement considered to have been applied incorrectly, (ii) identify the tax considerations and (iii) describe the facts and circumstances (amounts, structure, etc.). Taxpayers must submit the request before the end of the period established in the applicable DTT. The period for submitting the MAP request begins the day following the notification of the liquidation act or its equivalent. Once the corresponding deadlines have elapsed, the CA will determine whether the taxpayer may participate in the MAP. If the CA grants the request, the CA of the other country will be notified of the MAP through an Opening Letter.
The CA may reject a request to participate in the MAP. The CA may reject a MAP request when, among other things, (i) the DTT has no MAP provisions, (ii) the request was submitted after the deadline and (iii) the request is based on taxes that are not included in the DTT invoked.
The MAP may be terminated (i) through the taxpayer's withdrawal, (ii) by agreement of the Dominican CA in the event of a unilateral solution, and (iii) by agreement of the CAs of the countries that are parties to the DTT.