The Constitutional Court annulled the provisions of Law 668-16 and its implementing regulations, which establish a special regime of entry and contribution to the Dominican Social Security System for micro, small and medium-sized enterprises (Mipymes) and for entrepreneurs who register through the single window for formalization formalizate.gob.do.
Likewise, it declared article 24 of Law 668-16 of Entrepreneurship, approved on November 18, 2016, and article 46 of its application regulations, issued by decree 103-19, dated November 18, not in accordance with the Constitution. March 2019, in the government of President Danilo Medina.
Paragraph I of article 24 of law 668, provided that companies qualified to benefit from this special regime are totally exempt from the corresponding contribution for pensions for the first three years from the date of the formalization certificate issued by the corresponding Chamber of Commerce.
It indicates that from the fourth year of its formalizationthe Social Security Treasury will update the database and make changes to the system so that companies start their contributions under the provisions of Law No. 87-01 and its regulations, having to pay the entire contribution in accordance with the current legal framework on social security.
It provided that during the first three years, pay one hundred percent of the contribution corresponding to Family Health Insurance and Occupational Risk Insurance, in the proportion established by Law No.87-01, which creates the Dominican Social Security System.
The object of the Law 688-16 is the creation of a regulatory framework and institutional that fosters the entrepreneurial culture and promotes the creation and permanence of enterprises formally incorporated into the economy, through the establishment of incentives and elimination of obstacles that allow their development and consolidation in the national and international market.
Meanwhile, article 46 of decree 103-19, which establishes the Regulations of Law No. 688-16, on Entrepreneurship, issued by then President Danilo Medina, provided that in accordance with the provisions of article 24 of Law no. . 688-16, the National Social Security Council (CNSS) must issue a Special Regulation for Affiliation and Oversight of Entrepreneurial Companies to define the conditions, mechanisms, procedures and operation of the special entry and contribution regime for micro and small companies in the Dominican Social Security System (SDSS).
unconstitutionality action
The Constitutional Court accepted a direct action of unconstitutionality presented by the National Social Security Council (CNSS), on October 1, 2022.
The TC ordered the communication of the sentence, by Secretariat, to CNSS, the Senate of the Republic, the Chamber of Deputies and the Attorney General of the Republic and its publication in the bulletin of the High Court.
The sentencing device was published in the press release 32-23dated June 1, 2023.
The decision was not unanimous, since the communiqué indicates that it contains particular votes. The reasons that the Constitutional judges had to annul these legal and regulatory provisions are unknown, since the publication of the complete sentence, with the motivations, is pending.
Special regime
In article 24 of law 688-16, which annulled the TC, it was established that the special income regime and contribution to the SDSS for favored entities and individuals will last three years from the date the registration certificate is issued by the corresponding Chamber of Commerce.
Indicates that affiliation, contribution and participation in the System will be mandatory, following the conditions and mechanisms outlined in the law and in the Regulations for Affiliation and Supervision of Qualified Entrepreneurial Companies, which for this purpose must be issued by the CNSS, within the 90 days from promulgation of the law.
It indicates that in the case of existing companies, they must make the appropriate request addressed to the CNSS so that, after obtaining the approval, can enter this special regime.
“In the event that in the course of these three years the company Mipyme loses its micro or small status, it will be listed in accordance with the provisions of Law No.87-01 and its regulations”, the law states in article 24.
Paragraph I of that article provides that “Qualified companies will pay during the first three years one hundred percent of the contribution corresponding to Family Health Insurance and Occupational Risk Insurance, in the proportion established by Law No.87- 01, which creates the Dominican Social Security System, being totally exempt from the corresponding contribution for pensions for the first three years from the date of the formalization certificate issued by the corresponding Chamber of Commerce.”
AND in paragraph II specifies that self-employed workers and workers Independent professionals with a high ability to pay who have employees must become employers by formalizing their situation through the one-stop shop for formalization and registering in the Contributive Regime.
In addition, paragraph III establishes that self-employed workers and independent professional workers, without dependent employees, may register in the Subsidized Contributory Regime once they formalize their situation through the one-stop formalization window.