Tax controversies in the Dominican Republic regularly arise from inconsistencies detected by the tax revenue agency (Dirección General de Impuestos Internos or DGII) when comparing taxpayers’ filings. The withholding system currently in force with respect to income tax, as well as VAT (ITBIS), in connection with payments made to service providers, has been a particularly useful tool for the DGII, as it allows it to verify with relative ease that a person has received a payment based on the withholding made by another party. Another source of tax controversies relates to the 0.15% withholding on each payment made by electronic transfer or cheque, since, regardless of the fact that such withholding constitutes a financial expense deductible for income tax purposes, it also provides the DGII with a means to better understand the taxpayer’s cash flow and compare it with the taxpayer’s reported income.

Tax controversies also frequently result from audits conducted by the DGII, from which claims may arise in connection with a variety of situations, usually linked to discrepancies between what was reported by the taxpayer and what was reported by third parties (suppliers, customers and banking institutions). To a lesser extent, tax controversies also arise from tax reassessments that directly affect the amount payable by the taxpayer in respect of real estate property tax or asset tax.

Another source of controversy stems from the imposition of fines for violations of AML regulations applicable to entities regulated by the DGII (ie, non-financial obliged entities), as well as from cases in which the application of a tax incentive regime is challenged.

Most tax controversies in the Dominican Republic are linked to income tax and VAT and include, among others, the following:

• inventory discrepancies;
• disallowed expenses;
• failure to withhold taxes on salary payments, dividends, fringe benefits, or payments to third parties, among others;
• administrative penalties;
• challenges to related-party transactions; and
• revaluation of assets, particularly as a result of transactions that may generate capital gain.

There are also sectors subject to special tax burdens, as is the case with the alcoholic beverages industry, which has been subject to increased monitoring by the DGII. More recently, such monitoring has been intensified with respect to retail businesses that import their products from other jurisdictions and are suspected of not fully complying with customs duties; in these latter scenarios, enforcement actions have been carried out jointly by the DGII and the customs authorities.

Beyond the fact that certain individuals or entities do not report all of their income, disputes with the tax authorities are often the result of failing to comply with standard accounting and tax reporting practices. Basic errors – such as including more than 12 months in a fiscal period, or reporting information that is inconsistent with reports filed by third parties regarding the same information – occur with some frequency. It is essential to have a sufficiently qualified accounting team that does not make these kinds of mistakes.

If the controversy is the result of an inconsistency detected by the DGII, and the taxpayer is unable to prove otherwise, the only realistic option is to pay, with the possibility of reaching a payment agreement that could include a reduction of the applicable surcharges.

The OECD’s recommendations aimed at preventing Base Erosion and Profit Shifting (BEPS) have not contributed significantly to an increase in tax controversies in the Dominican Republic, although there have been a growing number of disputes related to transactions between related parties. However, the Dominican Republic has implemented several of the BEPS Actions, including the following:

• harmful tax practices (Action 5) through the implementation of the “substance over form” principle, under which the underlying economic reality of a transaction is intended to prevail;
• transfer pricing (particularly Actions 8 and 10), through transfer pricing regulations that have been progressively updated; and
• country-by-country reporting (Action 13), within the framework of transfer pricing regulations.

The DGII’s ongoing process of modernisation suggests that these actions will not only continue to deepen, but that others will gradually gain greater relevance as well, particularly Action 1 on the tax challenges arising from digitalisation and Action 4 on the limitation of interest deductions.

First, the DGII has the authority to challenge taxpayers’ filings, provided it does so within a period of three years from the deadline for filing the relevant tax return and making the corresponding payment. This period may be extended to a total of five years if the taxpayer failed to file the relevant tax return or if it is shown that such return contains false statements. In the latter case, however, precedent has established that the DGII must set out the alleged false statements within the aforementioned three-year period.

Assuming that the tax assessment is not time-barred, the DGII may initiate compulsory collection proceedings for what it considers to be the tax debt, and this may take several forms:

• The most common scenario is for the DGII to issue a providencia, which is essentially a resolution in which such agency relies on the tax credit determined by itself in order to adopt measures aimed at protecting that credit, particularly through conservatory measures. The main standard for the validity of this measure is that the alleged tax credit is at risk, such risk being determined by the taxpayer’s imminent insolvency. Since these cases concern conservatory measures, the Tax Code does not refer to any obligation to provide security or make prior payments in order to lodge a claim, which would consist of a tax litigation appeal (recurso contencioso tributario) that could be preceded by a request for interim relief (medidas cautelares). Exceptionally, a constitutional amparo action may also be available where a right recognised by the Constitution has been violated.
• A relatively less common scenario arises when the DGII issues a certificate of debt and serves the taxpayer with a payment demand (mandamiento de pago), as this entails the commencement of an enforcement process for sale at public auction, rather than merely conservatory measures. When the DGII serves a payment demand, the procedure is subject to certain distinguishing features –
1. the deadline to respond to the payment demand is only five days;
2. the grounds for response are limited to: (i) proof that the debt has been paid; (ii) proof that the claim is barred by the statute of limitations; and (iii) defects in the certificate of debt; and
3. only after the DGII rules on the defences raised by the taxpayer does an appeal become available through a tax litigation appeal (recurso contencioso tributario).

The Tax Code provides that a tax litigation appeal brought against the decision rejecting the taxpayer’s defences in connection with the service of a payment demand suspends the enforcement of the collection process, provided that the taxpayer pays an amount equivalent to 50% of the debt. Case law has established that payment of 50% of the amount allegedly owed is not a condition for filing the tax litigation action itself, but rather a condition for obtaining suspension of the collection of the alleged debt, while also recognising the availability of other remedies, such as interim measures (medidas cautelares), to stay the enforcement process.

The main triggers for a tax audit are generally related to inconsistencies detected by the tax administration (as explained in 1.1 Tax Controversies in This Jurisdiction) and, to a lesser extent, to companies operating in industries that are more vulnerable to money laundering. For instance, entities handling significant amounts of cash, or those classified as non-financial regulated entities under AML regulations, may be subject to a higher level of scrutiny. High net worth individuals are not, in and of themselves, targeted solely on that basis, unless such status was acquired recently by unconventional means, which may influence the decision to conduct an audit.

In addition to the foregoing, there are other circumstances that may trigger audits by the DGII, including:

• random selection, particularly in the case of companies that have reached a certain size;
• frequent dealings with entities located in low-tax or no-tax jurisdictions;
• business groups (domestic and foreign) in connection with transfer pricing regulations;
• retailers with prices that appear suspiciously low compared to market standards;
• a significant increase in assets or income volume without any apparent justification; and
• tax scoring, a new tool (currently in the process of broad implementation) that classifies taxpayers according to their level of risk and is expected to play an increasingly important role in the selection of audit targets.

A tax audit may begin at any time the DGII deems appropriate. The process is initiated through a notice informing the taxpayer that an audit will be conducted, specifying the initial documents expected to be made available and the date on which the audit will commence. The duration of the audit varies significantly depending on its scope, and may last from a few days to several months, as there is no statutory deadline for its completion. Of course, in order to initiate the audit, it must be taken into account that the periods under review are not barred by the statute of limitations.

Even where the periods subject to review are time-barred, it is unlikely that the audit itself can be avoided. This is because audits normally include open periods, and there is a legal obligation to retain tax-related records for a period of ten years. Accordingly, during the audit phase it is common to provide documents even for fiscal periods that are already barred by the statute of limitations. If such periods are nevertheless included in the assessment, a request to dismiss those charges may be filed through a Recurso de Reconsideración, and may thereafter be subject to further appeals before the Superior Administrative Court (TSA), the Supreme Court of Justice, and the Constitutional Court, subject to the applicable legal requirements.

In any event, and pursuant to the Tax Code, the commencement of a tax audit interrupts the statute of limitations period.

Tax audits may be conducted at the taxpayer’s premises (field audit) or from the DGII’s offices (desktop audit). Field audits are much broader in scope and therefore tend to last longer. They are usually carried out against large taxpayers or taxpayers showing particularly significant inconsistencies. Desktop audits are more common and generally arise from inconsistencies detected by the DGII, particularly through cross-checking of information, that do not require the level of scrutiny associated with a field audit.

In both scenarios, audits may be based on printed documents or on data made available electronically. However, the use of electronically obtained information is not only important at present, but is also expected to increase with the full implementation of electronic invoicing during the first half of 2026.

Tax audits, particularly field audits, can be demanding due to the large volume of information required and the amount of time that must consequently be devoted to the auditors. Section 1.2 Causes of Tax Controversiesidentifies the areas that receive particular attention, especially the following:

• expenses that are not clearly justified;
• the inventory;
• transactions with related entities and individuals, and the supporting documentation, including financing arrangements;
• supporting documentation for income; and
• offshore transactions, particularly those involving low-tax or no-tax regimes.

Inconsistencies detected by the DGII based on tax filings submitted by third parties also play a fundamental role in audits, since the taxpayer is required to provide documentation that confirms whether the inconsistencies identified are genuine or not.

Rules governing cross-border exchanges of information and mutual assistance between tax authorities have not, in themselves, significantly increased the number of tax audits. Traditionally, the Dominican Republic played a passive role in entering into agreements aimed at the exchange of information, but in recent years the country has taken a much more active approach, particularly in light of the BEPS recommendations.

Of particular importance was the notice published by the DGII in 2025 announcing, in the context of BEPS Action 13, the commencement of the first exchange of reports of multinational companies with the USA. In the near future, this initiative could result in a greater number of tax audits.

Auditors are entitled to request information, and it must be provided. Even if they request documents relating to periods that are already barred by the statute of limitations and insist on receiving them, the taxpayer should comply. If the auditors ultimately rely on expired periods in their assessment, however, this will strengthen the taxpayer’s case at a later stage.

Management should not be involved in the day-to-day handling of the audit. Junior staff, under the strict supervision of senior personnel, should be assigned to gather and provide the requested documentation and serve as the first point of contact.

At times, the auditors’ requests will be so extensive that assistance from several teams or departments within the company will be necessary in order to produce the relevant documents and information. Everyone involved must understand the importance of the process and the need to provide timely and adequate support.

In some cases, it is impossible to submit the requested documents within the original deadline. When that occurs, the taxpayer should request an extension and explain the reasons justifying it. A properly justified request for an extension is unlikely to be denied by the DGII.

All information requested by the DGII should be in writing and all documentation delivered by the taxpayer should be clearly identified and recorded through verifiable means.

It is extremely important for both the financial/accounting and legal teams of a company to be involved from the early stages of the auditing process. It is highly unlikely that a taxpayer will emerge entirely unaffected from a field audit; it will usually have to pay a specified amount or seriously consider litigation. Having access to the relevant information from the outset makes it possible to develop a reasonably clear legal strategy before the audit is concluded, including identifying the relevant documents and determining how they may be used strategically in the future.

When the tax authorities notify an additional tax assessment, filing an administrative claim is optional before initiating the judicial phase. This principle was established in early 2007 through Law No 13-07, although conflicting and misguided interpretations later arose as a result of the enactment of Law No 173-07. However, with the subsequent enactment of Law No 107-13, it was definitively established that exhausting the administrative route is optional, even though taxpayers often choose to do so in the hope of reducing the tax assessment when the expectations of the DGII are clearly exaggerated and, in that way, perhaps bring the matter before the courts with a somewhat reduced recognised contingency or exposed illegality.

The tax assessment is commonly the result of a desk or field audit and reflects the amount that the DGII believes is owed. If the taxpayer chooses to pursue an administrative claim, the usual course is through a motion for reconsideration, which is decided by the deputy director of the DGII – legal counsel, with the assistance of the staff assigned to the Reconsideration Department. This is an entirely written proceeding in which the taxpayer has the opportunity to challenge the tax assessment on any grounds deemed relevant, including violations of due process, technical objections regarding the applicability of a tax, or the calculation methodology used, among others. In the case of penalties, their applicability may likewise be challenged, as well as their amount when it is inconsistent with the legal parameters established by law. The deadline for filing the motion for reconsideration is 30 days from notification of the tax assessment.

When the tax authorities notify an additional tax assessment, filing an administrative claim is optional before initiating the judicial phase. This principle was established in early 2007 through Law No 13-07, although conflicting and misguided interpretations later arose as a result of the enactment of Law No 173-07. However, with the subsequent enactment of Law No 107-13, it was definitively established that exhausting the administrative route is optional, even though taxpayers often choose to do so in the hope of reducing the tax assessment when the expectations of the DGII are clearly exaggerated and, in that way, perhaps bring the matter before the courts with a somewhat reduced recognised contingency or exposed illegality.

The tax assessment is commonly the result of a desk or field audit and reflects the amount that the DGII believes is owed. If the taxpayer chooses to pursue an administrative claim, the usual course is through a motion for reconsideration, which is decided by the deputy director of the DGII – Legal Counsel, with the assistance of the staff assigned to the Reconsideration Department. This is an entirely written proceeding in which the taxpayer has the opportunity to challenge the tax assessment on any grounds deemed relevant, including violations of due process, technical objections regarding the applicability of a tax, or the calculation methodology used, among others. In the case of penalties, their applicability may likewise be challenged, as well as their amount when it is inconsistent with the legal parameters established by law. The deadline for filing the motion for reconsideration is 30 days from notification of the tax assessment.

Once the DGII issues its reconsideration decision, it is notified to the taxpayer for the purpose of enabling the taxpayer, within the following 30 days, to lodge a judicial appeal through a tax litigation action (recurso contencioso tributario), which is served on both the tax administration and the Administrative Attorney General (Procurador General Administrativo), a dependency of the Attorney General’s Office. The appeal is heard by a collegiate court (composed of at least three judges) and concerns the legal deficiencies that would justify the revocation of the reconsideration decision.

If there is basis to initiate a criminal tax litigation, the process begins with a complaint filed by the tax administration before the District Attorney. Under the standard procedure, the District Attorney admits the complaint and refers the matter to the competent court in order to request coercive measures against the taxpayer and the individuals and companies allegedly linked to the tax evasion scheme.

Civil Tax Litigation

Once the DGII issues its decision on the motion for reconsideration filed by the taxpayer, the taxpayer may appeal before the Superior Administrative Court (TSA). The taxpayer must serve its  appeal (recurso contencioso tributario) to the tax administration and to the Administrative Attorney General. They will have a period of 30 days to file their statements of defence. After this period has elapsed, and if the tax administration or the Administrative Attorney General has filed a statement of defence, the taxpayer is granted an additional period for reply, which is normally 15 days. Each filing may be accompanied by whatever evidence the parties deem appropriate. It should be noted that, at this stage, the procedure is fundamentally written and, consequently, no hearings are held, except in cases involving interim measures (medidas cautelares) or when a constitution-based action (acción de amparo) is filed. Once these periods have elapsed, the case file is left pending decision, which is normally issued within six months following the expiration of the deadlines for filing briefs.

Decisions of the Superior Administrative Court may be appealed (by way of cassation) before the Third Chamber of the Supreme Court of Justice, although they must first overcome the barriers to justify their admissibility (refer to 5.2 Stages in the Tax Appeal Procedure).

Criminal Tax Litigation

The system of appeals in criminal tax litigation is different, since the process begins before a court (Juzgado de Instrucción) whose sole purpose is to analyse the validity of the indictment and whether there are sufficient grounds to send the case to trial in light of the criminal offences that may effectively be established. The general principle is that this decision is not subject to appeal. Once this stage has been exhausted, the case is heard before a panel court (Tribunal Colegiado) which will determine whether there has been tax evasion and, potentially, money laundering. The judgment issued by this panel court may be appealed before a Court of Appeals and eventually challenged before the Criminal Chamber of the Supreme Court of Justice as stated in 5.2 Stages in the Tax Appeal Procedure.

Documentary evidence is of paramount importance in civil tax litigation proceedings, since transactions carried out by taxpayers that may generate taxable income are expected to be reliably documented. Unlike criminal tax litigation, where witnesses and cross-examination play a pivotal role, evidence in civil tax litigation is overwhelmingly documentary, and witness testimony is not relevant. As noted in 4.2 Procedure for Judicial Tax Litigation, the relevant documents must be filed together with the corresponding briefs submitted by the parties.

Civil Tax Litigation

The classic conception of evidence in civil tax litigation was that the tax administration did not have to prove the existence of the tax obligation; rather, it was for the taxpayer to prove compliance. This deeply flawed approach changed in 2020 with the implementation of a concept adopted by the Third Chamber of the Supreme Court of Justice based on the “dynamic burden of proof”, under which the tax administration has the obligation to prove the certainty of its assertions, while the taxpayer, at the same time, has the obligation to produce at least the documents required by tax regulations, as well as evidence of the facts that exempt it from the payment of taxes. Thus, the burden of proof falls on the party that is in the best position to provide it.

Criminal Tax Litigation

When it comes to criminal tax litigation proceedings, the entire evidentiary process changes, not only because of the necessary use of witnesses, as mentioned in 5.1 System for Appealing Judicial Tax Litigation, but also because the burden of proof falls exclusively on the District Attorney and the tax administration (if it is part of the process). This does not mean that the taxpayer should assume a passive position, but rather that, as a matter of law, the presumption of innocence must be fully rebutted.

When it comes to civil tax litigation and, as mentioned in the Trends & Developments report, statistically it is anticipated that around 80% of cases at the administrative claim stage will be rejected and that approximately 14% will be partially upheld. This means that nearly 95% of cases are rejected either totally or partially and, therefore, there are occasions when it is wise to hold certain arguments and evidence for the judicial stage. In fact, in some instances it is advisable, within the judicial phase, to wait for the DGII’s statement of defence before raising certain arguments and submitting certain evidence. By contrast, when it comes to criminal tax litigation, the procedure and formalities are highly structured and there is little, if any, room to produce evidence outside the legally created framework.

The possibility of settlement is always available, although the greatest difficulty generally lies in the expectations of the tax authority, which in some cases are impossible to meet. Evidently, the amount to be paid in the event of a settlement may be higher depending on the stage at which it is pursued; for example, in the context of criminal tax litigation, if it is sought after coercive measures have been imposed (pretrial detention, house arrest, and travel restrictions, among others) or after the taxpayer has been sent to trial, the margin for reaching a more reasonable agreement is narrower than when favourable results have been obtained by the taxpayer at those stages. It is worth noting that the use of expert reports and their eventual depositions is common practice (particularly in criminal cases), since both parties typically submit their own experts although this has little relevance with respect to the possibility of influencing a potential settlement. Likewise, in civil tax litigation, the likelihood of reaching a settlement within a reasonable range is much greater if there has been no judicial validation of the tax administration’s claims.

Local case law, both from the Constitutional Court and the Supreme Court of Justice, carries considerable weight. In the specific case of the Constitutional Court, its decisions are binding and must be followed by State bodies as well as by all the courts of the country. In the case of the Supreme Court of Justice, its precedents have always been relevant, but even more so since 2023, when a new statute was enacted restricting the right to appeal in cassation and opening avenues for its use, including those scenarios where the lower courts decide in contradiction of a precedent of the Supreme Court of Justice. It is not always the case, however, that the decisions of any of the chambers of the Supreme Court of Justice prevail over the Superior Administrative Court, since the latter could refuse to implement the criteria of the former and, in that case, the appellant may appeal before the Joint Chambers of the Supreme Court of Justice as discussed in 5.1 System for Appealing Judicial Tax Litigation.

With respect to the judgments of international courts, these could simply be used as supporting references for decisions taken locally, as may international guidelines and, to a lesser extent, doctrine. The foregoing implies that these are matters that could be taken into consideration by the courts of the Dominican Republic but they do not have any binding effect, except for international treaties on human rights.

Civil Tax Litigation

In the context of civil tax litigation, the judicial process begins before the Superior Administrative Court (Tribunal Superior Administrativo), which has the rank of a court of appeals. Decisions of the Superior Administrative Court may be appealed (by way of cassation) before the Third Chamber of the Supreme Court of Justice, although they must first overcome the barriers to justify their admissibility through a showing of what is called “interés casacional”, meaning that the case offers a minimum degree of relevance to justify intervention by this court. This relevance exists when the party filing the appeal can demonstrate that:

• the challenged judgment is contrary to prior decisions of the Supreme Court of Justice;
• there are conflicting decisions among courts of appeal or among the chambers of the Supreme Court of Justice; and
• rules are applied with respect to which there is no precedent of the Supreme Court of Justice and it is justified to create a precedent.

As a general rule, this process does not require hearings and the Supreme Court of Justice, if it grants the appeal, generally remands the case to a different chamber of the Superior Administrative Court, which must hear the case again. The Superior Administrative Court hears the case again under these premises and renders a decision, which may in turn be appealed again before the Joint Chambers of the Supreme Court of Justice (all the judges of the Supreme Court except those who have previously participated in the process) if it does not adopt the criteria of the Chamber of the Supreme Court of Justice that previously decided the matter. If, however, the Superior Administrative Court adopts the criteria of the Chamber of the Supreme Court of Justice, the cassation appeal will be inadmissible.

If the Joint Chambers of the Supreme Court of Justice uphold the criteria of the chamber that originally decided the case, the receiving Chamber of the Superior Administrative Court where the case is remanded is required to adopt the criteria of the Joint Chambers. If, as a result of this new remand, a third appeal (cassation) is filed, the Joint Chambers will render a direct judgment on the case, thereby concluding the process.

Criminal Tax Litigation

In the case of criminal tax litigation, the judicial process usually begins with a complaint filed by the DGII before the District Attorney’s Office, which is later converted into a formal criminal complaint, and in which the alleged unlawful acts committed by the taxpayer are essentially set out, together with the amounts that, in its view, must be paid. The District Attorney’s Office conducts the corresponding investigation and files an indictment against the taxpayer. Normally, this is preceded by a hearing on coercive measures, in which precautionary measures may be sought against the taxpayer, including pretrial imprisonment, as well as against the taxpayer’s assets.

Subsequently, an instructor judge (juez de instrucción) is apprised of the matter, before whom the parties have broad freedom to submit their defence evidence (to analyse relevance only), including prosed witnesses, expert witnesses and expert reports. This judge will analyse the indictment and the proposed evidence submitted by the parties in order to determine whether there is sufficient reason to justify a trial on the merits against the defendants. If so, the case is referred for trial on the merits before a panel court (Tribunal Colegiado), indicating the applicable legal grounds and the admitted evidence. Before the panel court, the guilt or innocence of the defendants is determined on the basis of the evidence presented, and a judgment of acquittal or conviction is issued. This judgment may be appealed and, although the process tends to be more streamlined at this stage, the Criminal Chamber of the Court of Appeals apprised of the matter has full authority to uphold or overturn the decision of the panel court.

The decision of the Court of Appeals may eventually be challenged by way of cassation before the Criminal Chamber of the Supreme Court of Justice, mainly when any of the following occurs:

• a sentence imposing over ten years of imprisonment is imposed;
• the judgment of the Court of Appeal is inconsistent with a prior ruling of that same court or of the Supreme Court of Justice; or
• the judgment is contrary to a precedent established by the Constitutional Court.

Common Features

It is important to emphasise that, in both civil tax litigation and criminal tax litigation, it is possible to bring the case before the Constitutional Court, provided that the legally established requirements are met, particularly in cases involving violations of so-called fundamental rights. If the “constitutional relevance” of the case and the violation of a fundamental right are established, the Constitutional Court rules on the merits and remands the case. The appeal before the Constitutional Court must be filed within 30 days following notification of the judgment, and the opposing party has the opportunity to submit its defences within a similar period after being served with the corresponding appeal. If the Constitutional Court grants the appeal, the case will be remanded to the Administrative or the Criminal Chamber of the Supreme Court of Justice (depending on the nature of the case) so that it may hear the matter on the basis of the criteria established by the Constitutional Court. If the appeal is denied, the case comes to an end.

Civil Tax Litigation

• Once the Superior Administrative Court issues its judgment, the interested party files its cassation appeal together with its evidence and serves it to the other parties. It is important to remember that the criteria for the “interés casacional” must be met, as mentioned in 5.1 System for Appealing Judicial Tax Litigation. 
• The cassation appeal is also served on the Attorney General.
• The party that obtained a favourable outcome files its statement of defence and supporting evidence within ten business days following receipt of notice of the appeal.
• After service of the statement of defence, the parties have an additional five business days to supplement the defences already submitted.
• The Chamber of the Supreme Court of Justice decides the case within a period that, by law, should not exceed two months after all the relevant procedural steps have been completed. In practice, the time taken for the Supreme Court of Justice to issue its decision is often somewhat longer.
• An appeal to the Constitutional Court is possible, subject to the admissibility requirements previously mentioned, including the alleged violation of fundamental rights.

Criminal Tax Litigation

• Unlike civil tax litigation, which is mostly a written process, each stage of the criminal tax litigation process is subject to hearings. As mentioned in the previous section, the decision of the Instructor Judge to send a case to trial is, generally speaking, not subject to appeal. Decisions issued at other stages, however, may be appealed. In the case of decisions issued by the panel courtthat determine guilt or innocence, these may be appealed before the Criminal Chamber of the Court of Appeals within 20 business days following notification of the judgment. The opposing party has ten business days after service of the appeal to file a statement of defence, and once these periods have elapsed, the corresponding hearing is held.
• After the hearing has been held, the court decides the case and, once the parties have the judgment in their possession after it has been served on them, they are subject to the same time periods mentioned above to appeal before the Criminal Chamber of the Supreme Court. The requirements for filing a cassation appeal before the Criminal Chamber of the Supreme Court of Justice are set out in 4.2 Procedure for Judicial Tax Litigation.
• As with the civil tax litigation process, an appeal to the Constitutional Court is possible, subject to the admissibility requirements previously mentioned, including the alleged violation of fundamental rights.

The formation or composition of the courts in tax-related disputes varies depending on whether the matter concerns civil tax litigation or criminal tax litigation.

Civil Tax Litigation

Judicial proceedings of this nature are first heard before one of the chambers of the Superior Administrative Court, which is ordinarily composed of three judges. As mentioned in 5.1 System for Appealing Judicial Tax Litigation, appeals against judgments rendered by the Superior Administrative Court are heard by the Third Chamber of the Supreme Court of Justice, which is composed of five judges. Thus, in civil tax litigation, the court is always composed of more than one judge.

Criminal Tax Litigation

This type of proceeding begins before an instructor judge , as mentioned in 5.1 System for Appealing Judicial Tax Litigation. If this judge sends the case to trial, the matter will be heard by a panel court composed of three judges. Any appeal will also be heard by a three-judge panel, and if the case reaches the Supreme Court of Justice, it will be decided by no fewer than three, and no more than five, judges.

Common Features

In all cases in which the proceedings are heard by a panel, decisions are taken by majority vote. Likewise, all judges in the Dominican judicial system involved in proceedings of this nature are appointed by the Supreme Court of Justice, except for the members of the Supreme Court of Justice itself and of the Constitutional Court, who are appointed by the National Council of the Magistracy (Consejo Nacional de la Magistratura), a mixed body composed of top elected officials (including the president and opposition leaders of the Dominican Republic) and certain members of both the Supreme Court of Justice and the Constitutional Court.

Dominican law does not provide for ADR mechanisms in tax disputes. However, it is worth noting that the DTTs entered into by the Dominican Republic with Canada and Spain establish a mechanism whereby a taxpayer who disagrees with the measures adopted by any of the tax authorities of those countries may, irrespective of any appeals that may be filed, submit the case to the competent authority. If that authority considers that the case has merit and is unable to reach a satisfactory solution on its own, it will endeavour to reach an agreement with the competent authority of the other State.

ADR mechanisms are not applied in tax disputes in the Dominican Republic.

Although there is no general possibility of resolving tax disputes through mediation or arbitration in the Dominican Republic, it is almost always possible to reach agreements with the tax authorities. While such agreements are unlikely to reduce the tax assessment and interest, this is not completely impossible, although in most cases the negotiations concern the applicable penalties. In any case, negotiation is more feasible during the early stages of the process. 

The Tax Code establishes a mechanism for binding advance information and ruling requests that provides certainty and simplifies taxpayers’ decision-making process. For this mechanism to be meaningful, all relevant elements must be submitted to the tax authorities, and the taxpayer may (and should) also justify its position and interpretation in order to influence the decision to be made.

The decision issued by the DGII is binding for that specific case and it does not constitute a precedent for other similar situations involving a third party, although it may be useful as a reference. The outcome of the binding consultation is not subject to any appeal.

ADR mechanisms are not applied in tax disputes in the Dominican Republic.

ADR mechanisms are not applied in tax disputes in the Dominican Republic.

If the tax authorities determine that the exact amount of tax was not paid by the taxpayer, this does not necessarily imply an administrative or criminal offence, although the former is more likely to apply by means of a fine. In other words, scenarios involving administrative fines arise far more frequently than those involving criminal offences, since fines may cover situations that do not necessarily entail an intent to evade tax, such as the failure to submit certain reports or the failure to retain documentation that should have been preserved.

In the case of criminal proceedings, these are normally initiated when there is evidence of tax fraud and, consequently, of money laundering. This is not a process that begins automatically; rather, it requires a much higher level of investigation, including compliance with the steps set out in 5.2 Stages in the Tax Appeal Procedure.

Traditionally, the DGII has followed the practice of initiating administrative proceedings aimed at collecting what it considers to be owed, in parallel with criminal proceedings, when it believes that the taxpayer has engaged in tax fraud. Although this is possible in theory, a recent decision of the Supreme Court of Justice upheld the view that the participation of the tax authorities in that context is limited exclusively to that of a victim, without the possibility of seeking civil damages when it has already sought such damages through other channels.

Accordingly, the civil tax assessment case, when challenged, is heard before the Superior Administrative Court and must be limited exclusively to the collection of the alleged tax debt, as well as to preventing the diversion of the taxpayer’s assets. If criminal proceedings are initiated in parallel, this is because the case potentially involves tax fraud and money laundering, in which event, the tax authorities may not pursue the same monetary claims in the context of a criminal process that they seek in the civil tax assessment process. In fact, Dominican law provides that if criminal proceedings are initiated after a civil tax case has already commenced, the latter must be stayed immediately.

The suspension of the civil tax case in this scenario is not determined by the amount of the debt, but rather by the fact that contradictory judgments could arise; and since criminal proceedings may potentially lead to imprisonment against an individual, they take precedence over the civil tax case.

Tax authorities initiate an administrative or criminal infringement process as mentioned in5.2 Stages in the Tax Appeal Procedure.

The stages of administrative proceedings and criminal cases are described in 5.2 Stages in the Tax Appeal Procedure.

In the specific case of criminal tax proceedings, the case is heard by a panel court once the indictment and the evidence have been reviewed by the instructor judge, and its decision is subject to the subsequent appeals (as mentioned earlier). When the panel court is seized of the case, it hears it for the first time, since it has had no prior involvement whatsoever in the matter. If, for any reason, any of the judges sitting on that court has previously participated in the case, that judge is required to recuse themselves, or any of the parties to the proceedings would be entitled to request their removal.

The panel courtwill only determine whether there has been criminal conduct consisting of tax fraud and money laundering, without entering into the technical particularities involved in deciding the legality of the corresponding tax adjustment/assessment, which fall more properly within the jurisdiction of the Superior Administrative Court and, subject to compliance with the relevant formalities, subsequently before the Supreme Court of Justice and thereafter, the Constitutional Court.

If the taxpayer pays the amount set out in the additional tax assessment, there is likely to be room to reduce the possibility of a fine being imposed, particularly if payment is made without initiating judicial proceedings. However, payment does not eliminate the conduct subject to the fine and, therefore, the imposition of such fine remains possible.

It is possible to pay the tax assessed, plus interest and penalties, or to enter into an agreement with the tax authorities or public prosecutor to prevent a criminal tax trial, although in practice the amounts that the tax authorities typically require in order not to pursue a criminal tax trial are excessive. This places the taxpayer in a difficult position, since it is often impossible for them to pay the amount demanded to settle the case. From past experience, the possibility of reaching such agreements exists, regardless of the type of case or the amount involved; as mentioned, the main obstacle is the amount that the tax administration expects to collect, which might be unreasonable.

See 5.2 Stages in the Tax Appeal Procedure.

In the Dominican Republic, there is no broad experience in the application of the General Anti-Avoidance Rule (GAAR) or Specific Anti-Avoidance Rule (SAAR). Nevertheless, there are certain precedents related to GAAR-type initiatives, such as the application of tax rules based on economic reality rather than legal form, where such forms may be disregarded when deemed manifestly inappropriate. There are also limited precedents under SAAR, particularly in the area of transfer pricing. In both scenarios, the tax administration has challenged certain transactions, giving rise mostly to administrative cases in which the original transaction is disregarded and a tax adjustment is made.

Jurisdiction remains with the State that performs the additional tax assessment or tax adjustment. If the tax administration of the Dominican Republic is the one that performs the additional tax assessment or tax adjustment, the dispute will be heard in the Dominican Republic. No scenarios are recognised in which conflicts relating to tax matters may be resolved through arbitration.

Given that the Dominican Republic has only two treaties aimed at avoiding double taxation (with Canada and Spain), the situation is limited to scenarios involving investments from those countries. Under that premise, it is essential to understand the parameters that determine whether or not an entity constitutes a permanent establishment (PE), because if it does, it will be taxed under Dominican law and, where appropriate, must take the necessary measures (preservation of documents and proof of payments and contracts, among others) in order to avoid paying the same taxes in its country of origin. If it is not a PE, taxation would be limited to its country of origin.

In the Dominican Republic, there is limited case law involving the application of GAAR or SAAR in cross-border situations covered by bilateral tax treaties. The most relevant case occurred in 2006, when, in connection with the offshore sale of shares in a foreign entity that held rights economically exploited in the country, the DGII claimed capital gains tax based on the GAAR principle that substance prevails over legal form. Legislation on this topic was subsequently enacted to clarify eventual claims of this nature.

Although judicial precedents in the Dominican Republic regarding international transfer pricing are limited, domestic tax courts have full jurisdiction over any property, asset or right with an impact in the Dominican Republic, even in disputes in which a tax treaty applies.

Advance pricing agreements (APAs) are common mechanisms in the Dominican Republic to avoid or mitigate litigation in transfer pricing matters. The process applies to taxpayers engaged in transactions with related parties, and such taxpayers must submit a written request to the DGII, within the three months following the beginning of the fiscal year, expressing their intention to enter into an APA. The proposed agreement is submitted by the taxpayer and may be accepted, rejected or modified by the DGII through a resolution. In the event of rejection or modification, the resolution is not subject to appeal, although in the specific case of a modification, the taxpayer is not required to accept it. If an APA is executed, it applies to the current fiscal year and the following three fiscal years.

The most common disputes related to cross‑border situations are linked to transfer pricing involving jurisdictions with low or no taxation, challenges regarding the scope of tax exemptions, and, to a lesser extent, capital gains arising from the sale of shares in entities that retain some economic interest in the Dominican Republic. Ideally, binding ruling requests should be sought, as discussed in 6.4 Avoiding Disputes by Means of Binding Advance Information and Ruling Requests, in order to mitigate the risk of potential litigation.

State aid disputes do not apply in the Dominican Republic.

State aid disputes do not apply in the Dominican Republic.

State aid disputes do not apply in the Dominican Republic.

State aid disputes do not apply in the Dominican Republic.

The Dominican Republic is not a signatory to the MLI. However, it is widely understood that the State has an interest in maintaining control over the process that determines the legality or validity of its tax assessments, especially considering that for many years the tax authority and the courts appeared to be more aligned in their criteria. However, in recent years a more rights‑protective approach has been adopted, mainly at the level of the Supreme Court of Justice and the Constitutional Court which, while undoubtedly recognising the State’s right to pursue tax claims, has emphasised that such actions cannot infringe upon taxpayers’ rights.

The Dominican Republic does not provide for binding arbitration in tax matters, including its DTTs. In fact, the DTTs signed by the Dominican Republic make no reference to arbitration, and neither does the Tax Code.

The Dominican Republic has not entered into agreements with other states to include this procedure, and it has not adopted an international arbitration model that contemplates this option.

The Dominican Republic is not a member state of the European Union and it is therefore not subject to its directives.

The Dominican Republic is not a member state of the European Union and it is therefore not subject to its legal instruments. In any case, the Dominican Republic is not a party to international tax arbitration procedures, with all disputes being resolved before the Dominican courts.

The Dominican Republic is not in the process of applying these initiatives.

The Dominican Republic does not apply these procedures.

The Dominican Republic only applies domestic rules and instruments to settle tax disputes.

The Dominican Republic does not provide for the use of international tax arbitration and, consequently, the professionals involved (essentially lawyers and accountants) are local or local-based.

Administrative litigation is not subject to the payment of fees at any stage. 

Administrative litigation is not subject to the payment of fees at any stage.

A claim for damages does not arise from the mere fact that a court determines that an additional tax assessment is absolutely void and null, since the tax administration is exercising a right. However, the possibility of obtaining compensation is more feasible when the tax administration engages in clearly unlawful actions or carries out attachment or enforcement procedures that are later overturned by a court. In such scenarios, liability falls not only on the tax administration for the damage caused, but also on the officials who made the unlawful decisions.

ADR mechanisms are not available for tax purposes in the Dominican Republic.

During 2025, the judicial branch reported that the Superior Administrative Court received 1,030 tax‑related appeals and issued decisions in 928 of them (90.1%). There is no publicly available information detailing the number of tax cases pending decision or already decided by the Supreme Court of Justice or the Constitutional Court, nor the value involved.

In the Dominican Republic, no statistics are available regarding the number of cases initiated and terminated every year relating to different taxes.

There is no available information on this matter at the level of court decisions. The closest data comes from reconsideration requests filed before the DGII, from which the following can be inferred:

• on average, over 80% of reconsideration cases are rejected;
• roughly 14% are partially reconsidered; and
• approximately 4.7% are fully reconsidered (voided).

See 2.6 Strategic Points for Consideration During Tax Audits. It is also essential to have a clear legal assessment of the facts from the outset in order to determine whether it is advisable to continue with the litigation or whether it is more efficient to settle the case. There are scenarios in which the taxpayer may indeed be correct, but the cost and time involved in litigating against the tax administration can be prohibitive, and the sound business decision may not necessarily be to litigate – unless the matter is existential due to the amount assessed, reputational implications, or the potential disregard of rights granted under a tax exemption regime, among other factors.