In general, an offense is a prohibited act under threat of penalty. More specifically, in tax matters, the infringement is any form of non-compliance with the tax laws. In this sense, article 246 of Law No. 11-92 establishes that the various forms of non-compliance with the provisions of the Code and special tax laws, typified in it and sanctioned by the Tax Administration and the competent courts, constitute tax infractions. . This way, any form of violation of the tax legislation results in the classification of an infraction and, consequently, the application of sanctions considered coercive.
In our law, tax violations are classified into tax offenses and tax crimes. Tax offenses are sanctioned pecuniarily and are the following: tax evasion that does not constitute fraud, delay, non-compliance with formal duties by both taxpayers and Administration officials. As for tax crimes, in addition to being governed by the provisions of the Tax Code, they are subject to the procedural rules established in common criminal law. Article 204 of the Tax Code establishes that tax fraud, the clandestine elaboration and trade of products subject to taxes and the manufacture and falsification of species or fiscal values are tax crimes. In turn, the falsity in the declarations that, in accordance with the provisions of the law, must be given under oath, is instituted as a tax offense, in addition to providing that, if in tax matters common crimes are incurred and sanctioned by the legislation common criminal, the responsibility for these crimes will be prosecuted independently of the corresponding one for pecuniary infractions.
Regarding tax evasion, it is verified when fraudulent maneuvers are exercised to hide or ignore subjection to the tax. Evasion can be carried out due to omission of the tax base or tax returns, due to simulated operations, deduction of expenses that do not correspond to the business, fraudulent misrepresentation, among other causes. According to the Tax Code, the presentation of a false or inaccurate declaration and the total or partial omission of payment of the tax constitute cases of evasion.
With regard to default, this is configured when tax obligations are not complied with in a timely manner. Unlike civil law, in tax matters, default is classified as soon as there is a breach, without the need to notify the debtor (taxpayer or responsible party). In this sense, the Tax Code in its article 26 establishes that “The timely failure to comply with the tax obligation constitutes the taxpayer in arrears, without the need for any requirement or action by the Tax Administration.” The same Code in its article 27 continues to provide regarding the delay that “…the delay enables the exercise of the executory action for the collection of the debt and gives rise to full right the obligation to pay, together with the tax, a compensatory interest…”. Thus, only the fact of timely non-compliance with the tax obligation configures the default and results in the application of financial penalties.
Despite the fact that the aforementioned article 26 considers the delay as a simple consequence derived from the breach of the tax obligation, the same Tax Code in article 205 configures it as a tax offense classified within the types of tax offenses, and even more so the Article 251 establishes it as “…the person who pays the tax debt after the date established for this purpose incurs the offense of delay…”, “the delay is configured both in cases of spontaneous payment and in those made by summons from the Tax Administration.” In turn, article 252 refers to the penalty for delay, providing that “Delay will be sanctioned with surcharges of 10% the first month or fraction of a month and an additional 4% for each subsequent month or fraction of a month.”
Although there have been several projects for its regulation, the provisions of Title I of the Tax Code related to general rules, procedures and tax sanctions do not have a regulation like the other Titles of the Tax Code, which allow the application of its provisions in a well-founded manner. , as well as contributing to good administration, avoiding, in many cases, interpretations that could lead to the inaccurate application of legal provisions. Recently, a project to amend Title I of the Tax Code has become known, which we can discuss in other installments. We trust that the proposed and approved modifications, in the event that the modification is effectively carried out, will contribute to the efficient structure and operation of the Dominican tax system.
—The author is
Tax and Legal Services Partner at Deloitte Dominican Republic.
