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Transfer pricing in the Dominican Republic: arm's length rule, DIOR, local and master files and penalties

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Last verified: 2026-10-30 · Status: Stable

Art. 281 applies the arm's length standard to dealings with foreign and resident related parties and with low tax jurisdictions, related or not. Taxpayers file an annual DIOR, and those above an inflation adjusted threshold also prepare local and master reports. Failure can cost up to three times the formal duty fine, and advance pricing agreements are available.

USD figures use the Banco Central de la República Dominicana reference selling rate of RD$60.8594 per US dollar for 28 October 2026, the latest row in its published rate file on the verification date, rounded to the cent.

Key facts

Related party transactions below which local and master reports are excused16025436 DOPDecreto 78-14 art. 18 as amended by Decreto 256-21; DGII brochure, adjusted yearly, as of 2026-10-30 · in force
Country by country report threshold38800000000 DOPNorma General 08-2021, as of 2026-10-30 · in force
DIOR120 days after close, per DGII brochureDecreto 256-21, as of 2026-10-30 · in force
Advance pricing agreement termCurrent year plus 3 yearsLey 11-92 art. 281 bis paragraph III, as of 2026-10-30 · in force

The rule

1. Transactions between a resident and a related person must be priced as independent parties would in comparable operations. The rule also covers a resident dealing with a resident related party, and with anyone in a preferential, low or no tax jurisdiction, related or not.Ley 11-92, Código Tributario, art. 281 and paragraph I, 2012-11-09 official text · verified 2026-10-30
2. Related parties include direct or indirect participation in management, control or capital, a company and its branches, exclusive agents, distributors or concessionaires, a party receiving or transferring 50% or more of production, one bearing the losses of another, and a unit of decision. Where participation is measured by capital or votes, the test is at least 50%.Ley 11-92, Código Tributario, art. 281 paragraph IV, 2012-11-09 official text · verified 2026-10-30
3. The accepted methods are comparable uncontrolled price, resale price, cost plus, profit split and transactional net margin. Listed commodity imports and exports use the market quotation on the set date.Ley 11-92, Código Tributario, art. 281 paragraphs VII to X, 2012-11-09 official text · verified 2026-10-30
4. A result inside the statistical range is accepted. Outside the range, the median applies.Ley 11-92, Código Tributario, art. 281 paragraph XI, 2012-11-09 official text · verified 2026-10-30
5. Intra group services are accepted at market prices only if actually provided, if they give an economic or commercial benefit, and if the amount is comparable. Excess related party interest or fees can be challenged as not necessary.Ley 11-92, Código Tributario, art. 281 paragraphs III and XII, 2012-11-09 official text · verified 2026-10-30
6. Taxpayers file a Declaración Informativa de Operaciones entre Relacionados (DIOR) each year whether or not transactions took place. DGII's brochure says that from fiscal year 2022 it is due within 120 days of the close, with the IR-2, and its web page still says 180 days.Decreto 78-14 of 6 March 2014 as amended by Decreto 256-21, per DGII, art. 18, 2021-04-20 official text · verified 2026-10-30
7. The local and master reports are due within 180 days after the DIOR deadline, from fiscal year 2021. They are excused where related party transactions do not exceed RD$16,025,436, an amount shown in DGII's brochure and adjusted yearly, and there are no dealings with preferential regimes. Transactions with resident related parties are excluded from the report.Decreto 78-14 of 6 March 2014 as amended by Decreto 256-21, per DGII, art. 18 paragraph V, 2021-04-20 official text · verified 2026-10-30
8. Country by country reports apply to ultimate parents or group entities resident in the country where consolidated group income is at least RD$38,800,000,000, due 12 months after the group year end.Norma General 08-2021, per DGII, Brochure summary, 2021-10-05 official text · verified 2026-10-30
9. Late, false or incomplete documentation is a breach of formal duties, with up to three times the art. 257 sanctions. If an adjustment is confirmed, the art. 250 evasion sanction applies on top of the tax.
Cost to do it: Art. 257 sets 5 to 30 minimum salaries, so up to 90 salaries with the triple, plus up to 0.25% of prior year income for information failures.Ley 11-92, Código Tributario, art. 281 ter, 2012-11-09 official text · verified 2026-10-30
10. Advance pricing agreements cover the current year and the three following, and can reach back up to two closed years. A DGII denial or change cannot be appealed. DGII can also fix safe harbour margins by sector, and all inclusive hotels are referred to in that rule.Ley 11-92, Código Tributario, art. 281 bis, 2012-11-09 official text · verified 2026-10-30
11. Low tax jurisdictions are those with tax notably below the Dominican general regime, or labelled non cooperative by the Global Forum. Jurisdictions with a treaty or information exchange agreement with exchange clauses go on DGII's list of those that are not low tax.Ley 11-92, Código Tributario, art. 281 quater, 2012-11-09 official text · verified 2026-10-30
FilingWhoWhen
DIORTaxpayers with related party or low tax dealingsWithin 120 days of close per the brochure; DGII page says 180
Local reportAbove the threshold180 days after the DIOR deadline
Master reportMultinational group members above the threshold180 days after the DIOR deadline
Country by country reportGroups with consolidated income from RD$38,800 million12 months after group year end

Transfer pricing filings

Worked example

  • A distributor buys from its parent. Comparable net margins run from 2.0% to 5.0% with a median of 3.5%, and its margin is 1.0% on sales of RD$200,000,000 (about US$3,286,263.09). DGII moves it to the median, adding RD$5,000,000 (about US$82,156.58) to income and RD$1,350,000 (about US$22,182.28) of tax at 27%, before sanctions.

Step by step

  1. List related parties under the art. 281 paragraph IV tests.
  2. Add transactions to compare with the current threshold, using the latest DGII update.
  3. Pick the method and keep the analysis ready when filing the IR-2.
  4. File the DIOR with the IR-2 to stay inside the shorter deadline.
  5. Prepare local and master reports for the following deadline.

Common traps

  • DGII sources conflict on the DIOR date. Filing within 120 days is safe under both.
  • Art. 281 ter requires the analysis to exist when the income tax return is filed, even if the report is sent later.
  • Sales to a low tax jurisdiction count even with an unrelated buyer.
  • The threshold in the brochure is not dated. DGII publishes yearly updates by notice, and no 2026 update was found.

Sources

Related pages

Related: Dominican Republic country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

← Tax on checks and electronic transfers in the Dominican Republic: 0.2% since 3 July 2026Thin capitalization in the Dominican Republic: the 3 to 1 interest limit and three year carryforward →

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