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CONTADORES DOMINICANOS

What Are Tax Exemptions in the Dominican Republic?

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Tax benefits refer to those deductions and exemptions that relieve certain taxpayers from paying a tax.

In the Dominican Republic, the application of these benefits aims to promote certain economic sectors, develop specific regions, stimulate employment, and attract foreign investment.

Learn about tax exemptions in the Dominican Republic that apply to some taxpayers. What are tax exemptions in the Dominican Republic? We’ll explain it here.

What Are Tax Exemptions?

They are benefits granted by the government that allow certain individuals, companies, or economic activities to be partially or fully exempt from paying taxes.

Special Regime Laws:

  • Law 532, on Agricultural and Livestock Promotion.
  • Law 890, on the Promotion of Free Zones.
  • Law 56-07, on the Textile and Footwear Chain.
  • Law 158-01, on Tourism Incentives.
  • Law 57-07, on Incentives for the Development of Renewable Energy Sources.
  • Law 502-08, on Books and Libraries.

If you are a taxpayer and need more information and/or advice on tax exemptions, at Contadores Dominicanos, we can provide the assistance you need to ensure your company or corporation is up to date with tax filings.

Tax Benefits and Exemptions in the Dominican Republic:

Law 532 on Agricultural and Livestock Promotion

Beneficiaries: Agricultural and livestock companies.

Benefits:

  • A single 5% ad valorem tax on the importation of agricultural machinery and equipment.
  • Exemption from other fiscal and municipal taxes, as provided in Law No. 448, for all goods listed in Articles 46 and 47 of Law 532.
  • Exemption from import duties and taxes on products such as pesticides, raw materials, additives, seeds, live plants, and other vegetative propagation inputs intended for agricultural and livestock exploitation.
  • The following agricultural operations will benefit from the exemption and the single tax:
  • Cattle, goats, pigs, donkeys, rabbits, and poultry for breeding, as well as liquid or frozen semen for all domestic species.
  • Fertile eggs for incubation.
  • Premix, concentrates or raw materials for concentrates, vitamins, minerals, and additives.

Law 890 on the Promotion of Free Zones

Beneficiaries: Special customs control regime.

Benefits: Exemption of up to 100% of the following taxes:

  • Income Tax, established by Law 5911.
  • Payment of taxes on construction, loan contracts, and the registration of real estate transfers.
  • Payment of municipal taxes affecting their activities.
  • Exemption from import duties and taxes related to raw materials, construction materials, office equipment, etc.
  • Export and re-export taxes, except those established in paragraphs f and g of Article 17 of the Law.
  • All license taxes on assets or wealth and the ITBIS tax.

Law 56-07 on the Textile and Footwear Chain

Beneficiaries: Companies belonging to the textile, clothing, and accessories chain; leather, footwear manufacturing, and leather goods.

Benefits:

  • Exemption from ITBIS and other taxes on the importation and/or purchase in the local market of inputs, raw materials, machinery, equipment, and services.
  • Exemption from Income Tax for companies in this sector not covered by another special customs regime.

Law 158-01 on Tourism Incentives

Beneficiaries: Individuals or legal entities domiciled in the country who promote, undertake, or invest capital in tourism activities mentioned in this Law.

Benefits: Exemption of up to 100% of the following taxes:

  • Income Tax, as indicated in Article 2 of this Law.
  • National and municipal taxes that are charged for using and issuing construction services.
  • Import duties and other taxes, including ITBIS.
  • National or international financing, and the interest on such financing, will not be subject to any tax or withholding.

Law 57-07 on Incentives for the Development of Renewable Energy Sources

Beneficiaries: Companies and individuals developing projects dedicated to the production of energy or biofuels from renewable sources.

Benefits:

  • Exemption of 100% of all taxes associated with importation, ITBIS, and all taxes on the final sale of imported machinery and transformation equipment.
  • A 5% reduction in taxes on external financing, including interest payment on external financing, according to Article 306 of the Tax Code.
  • Incentives for self-producers, granting up to 40% of the investment cost in equipment as a single credit against Income Tax.
  • Incentives for community projects up to 500 kW, with access to financing of up to 75% of the total cost of the project and its installation.

Law 502-08 on Books and Libraries

Beneficiaries: Publishing industry, distribution, and sale of books.

Benefits:

  • The importation and sale of books and related editorial products of a scientific and cultural nature are exempt from ITBIS.
  • The book production chain and editorial products, including their graphic and printing components, are free from ITBIS.
  • The importation and sale of books and related editorial products of a scientific and cultural nature are exempt from customs duties and taxes.
  • The export of books, brochures, magazines, or publications of a scientific or cultural nature is exempt from all duties.
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