Tax Incentives
The Dominican Republic offers several tax incentives aimed at encouraging foreign investment, particularly in sectors such as real estate, tourism, manufacturing, and renewable energy. These incentives make the country attractive for investors looking to capitalize on favorable financial conditions. Here’s an overview of key tax benefits:
01
Confotur Law (Law 158-01) for Tourism and Real Estate Development
This law, officially known as the Tourism Incentive Law, provides significant tax benefits for investments in tourism-related projects. It's especially advantageous for developers and buyers in tourist zones, such as Samaná, Punta Cana, and Puerto Plata.
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100% exemption from:
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Income tax for 15 years.
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Transfer tax on the purchase of real estate.
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Property tax (1% annually on properties over RD$7.5 million).
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Import duties on goods, equipment, and construction materials necessary for the project.
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Capital gains tax on real estate sales during the tax exemption period.
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This law applies to hotels, resorts, residential properties, and other tourism-related developments, making it a major incentive for foreign investors.
03
Renewable Energy Law (57-07)
Investors in renewable energy projects, such as solar, wind, and hydroelectric, can benefit from tax incentives under this law.
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100% exemption from:
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Import duties on renewable energy equipment.
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Income tax for 10 years.
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ITBIS (sales tax) on all renewable energy purchases.
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Additionally, individuals and businesses installing renewable energy systems receive a 75% tax credit on their investment.
05
Foreign Pensioner and Retiree Incentives (Law 171-07)
This law grants tax benefits to foreign retirees who choose to relocate to the Dominican Republic. To qualify, a retiree must demonstrate a monthly income of at least US$1,500 from a foreign source, such as a pension.
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Exemptions include:
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Import duties on household goods.
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Property transfer tax for the first property purchase.
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Income tax on income from foreign sources (such as pensions).
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Capital gains tax on investments within the country.
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02
Free Trade Zones (FTZ) Law
The Dominican Republic's Free Trade Zones offer various tax breaks for businesses involved in manufacturing, assembly, and exportation.
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100% exemption from:
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Income tax for up to 15 years.
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Customs duties on imports of raw materials, equipment, and machinery.
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Sales tax (ITBIS) and export duties.
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Municipal taxes on company assets and transfers of industrial real estate.
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Capital gains tax.
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These zones offer strategic benefits for investors looking to establish export-driven businesses.
04
Special Zones for Border Development (Law 28-01)
This law applies to investment projects in border regions and provides exemptions to foster economic growth in these areas.
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100% exemption from:
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Income tax for 20 years.
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Customs duties on equipment, materials, and goods for industrial projects.
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ITBIS (VAT) on certain goods.
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06
No Double Taxation Treaties
The Dominican Republic has double taxation agreements with several countries, including Canada, Spain, and France, which prevent investors from being taxed twice on income earned in the Dominican Republic.
These tax incentives are designed to foster foreign investment, particularly in tourism, real estate, and energy sectors, making the Dominican Republic an appealing option for international investors looking for growth opportunities with reduced financial burdens.