Tax benefits are 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 some regions, stimulate employment, and attract foreign investment.
Learn about tax exemptions in the Dominican Republic that apply to certain taxpayers. What are the tax exemptions in the Dominican Republic? We explain it here.
What are tax exemptions?
They are benefits granted by the Government that allow certain individuals, businesses, or economic activities to be exempt, either wholly or partially, 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 57-09, 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 help you need to keep your business or company up to date with tax filings.
Benefits and Tax Exemptions in the Dominican Republic:
Law 532 on Agricultural and Livestock Promotion
Beneficiaries: agricultural and livestock businesses.
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:
- Livestock, including cattle, goats, pigs, donkeys, rabbits, and poultry for breeding, as well as liquid or frozen semen for all domestic species.
- Fertile eggs for incubation.
- Premixes, 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% from the following taxes
- Income Tax, as established by Law 5911.
- Payment of construction tax, loan contracts, and the registration of property 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 items f and g of Article 17 of the Law.
- All patent taxes on assets or equity and the ITBIS tax.
Law 56-07 on the Textile and Footwear Chain
Beneficiaries: Companies in the textile, apparel, and accessory chain; leather, footwear manufacturing, and leather goods.
Benefits:
- Exemption from ITBIS and other taxes for the import and/or purchase of inputs, raw materials, machinery, equipment, and services in the local market.
- Exemption from Income Tax for companies in this sector not subject to another special customs regime.
Law 158-01 on Tourism Incentives
Beneficiaries: Individuals or entities domiciled in the country who promote, undertake, or invest capital in tourism activities mentioned in this Law.
Benefits: Exemption of up to 100% from the following taxes:
- Income Tax, as stated in Article 2 of this Law.
- National and municipal taxes levied for using and issuing construction services.
- Import taxes and other fees, including ITBIS.
- National or international financing, and the interest on such financing, will not be subject to taxes or withholding.
Law 57-09 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:
- 100% exemption from all taxes associated with the importation, ITBIS, and all taxes on the final sale of imported equipment, machinery, and transformation equipment.
- 5% reduction in taxes on external financing, in terms of interest payments 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 can access financing of up to 75% of the total project cost 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 production chain of books and editorial products, including graphic and printing components, is exempt from ITBIS.
- The importation and sale of books and related editorial products of a scientific and cultural nature are exempt from taxes and customs duties.
- Exports of books, brochures, magazines, or publications of a scientific or cultural nature are exempt from all duties.
