Dominican Republic

In the Dominican Republic, tax incentive laws exist for the following.

Tourism incentives

Law 158-01 on the Promotion of Tourist Development for New or Low Development Locations in Provinces and Areas with Great Tourist Potential, and for the Creation of the Tourist Promotion Official Fund, enacted on 9 October 2001, establishes special incentives and benefits to individuals or companies, residing in the Dominican Republic, that promote or invest capital in any tourist activity described in said Law. In order to benefit from said Law, a special Resolution shall be obtained from the Council for the Promotion of Tourism. Law No. 195-13 added other areas that could benefit from the tax incentives established in Law 158-01.

Alternative energy incentives

Law 57-07 provides significant incentives for the use and development of renewable sources of energy. The renewable energy sources subject to this law include bio-fuel, bio-diesel, ethanol, and wind, solar, and other renewable energy.

Additionally, the credit on investment expense granted to self-power producers is 40%.

Industrial renovation and modernisation incentives

The main objective of Law 392-07 about competitive development and local industrial manufacture is to promote policies and support programs for industrial renovation and innovation in order to diversify local production, create industrial parks, and link the country to international markets. Main benefits include VAT exemption on import of machinery and materials, priority on imports granted at customs, and accelerated depreciation.

Industrial FTZ operations

Law 8-90 about Export FTZs was created to promote employment, production, and economic growth. Entities that would like to benefit from said Law shall be engaged in manufacture/service within a confined space (FTZ park). Special FTZ classification entities, which are entities located outside an FTZ park (e.g. call centres), were abolished with Law No. 253-12. In addition to this, Law 253-12 taxed dividends paid by FTZ entities.

Border development incentives

Law No. 28-01, dated 1 February 2001, creates a special development frontier zone for industrial, agro-industrial, agriculture/livestock, metalmechanic, FTZ, tourism, metallurgical, and energy companies that exist at the time of promulgation of said law, and those that may be installed in the future within the border of the Dominican Republic and Haiti. Main incentives include 100% exemption on CIT and VAT, as well as customs duties.

Foreign tax credit

Taxes paid abroad on foreign income taxed in the Dominican Republic may be credited up to the amount of the Dominican tax liability generated by such income. The credits should be determined on a case-by-case basis.