Dominican Industrial Qualification Certificates were awarded to 16 companies on May of 2015 by the Center for the Industrial Development and Competitiveness that will benefit from the provisions established under Law 392-07 of Industrial Development and Competitiveness; including tax and custom duties exemptions, in order to promote actions that shall endeavor the improvement in the productivity of processes, products and industrial services.

Approximately 500 companies have qualified since the entry into force of Law 392-07, in 2007.

For qualified industries, Article 18 of Law 392-07 establishes a special customs regime for imports which provides for the following benefits:

Exemption from the Tax on the Transfer of Industrialized Goods and Services (“ITBIS” for its Spanish acronym) applicable to raw materials, industrial machinery for specific types of industries, and to raw materials and capital assets which benefit from 0% rate of customs duties.

When, by virtue of special laws or tax regimes, certain facilities for the purchase of goods abroad are provided for; identical facilities shall apply to the purchase o fungible goods produced in the Dominican Republic (“DR”).

Companies operating in the DR which export to third markets, shall have the right to tax reimbursements, based on their percentage of exports, of:

– ITBIS;

– Selective Consumption Tax applicable to telecommunications, insurance and gas;

– Issuance of Checks tax;

Such reimbursement would be determined based on the payments or advances made by qualified industries of such taxes, which were not compensated.

On the other hand, raw materials and inputs sent to DR customs territory from any industry  or zone under a special regime, to undergo complementary industrial or partial processes by industrials in the Dominican customs territory, should be exempt from import taxes, customs duties and rights and related taxes.

As a way of stimulating the transfer of knowledge, the innovation and technological development of the manufacturing industry, an income tax exemption in the DR (no withholding tax) shall apply to income derived from payments made abroad for professional services related to product development projects, materials, production processes, technology investigation and development, personnel training, innovation, investigation, training, protection to the environment, and any type of consulting or technical assistance.

Do you want more information about Dominican industrial sector tax incentives? Contact Us.

ABOUT THE AUTHOR: Dra. Maria Arthur Rodger is a Partner leading the Tax & Private Client areas at Arthur & Castillo Law Firm and Attorneys in the Dominican Republic. She specializes in tax law and real estate advisory (Tax LLMs in Georgetown Law Center in Washington, D.C. & Universitat Pompeu Fabra in Barcelona) with more than 20 years of experience. Dra. Maria Arthur is also a CPA, Certified Bankruptcy Liquidator and Legal Interpreter.

Email: [email protected]

Disclaimer: This publication is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. For specific technical or legal advice on the information provided and related topics, please contact the author.

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