On October 9, 2001, the National Congress passed Ley No. 158-01 on promoting tourism development in underdeveloped tourism hubs and new hubs in provinces and localities with great potential, with the aim of accelerating a streamlined process of developing the tourism industry in every region throughout Dominican territory with the potential and natural conditions for tourism.
This law created the Tourism Development Council (Consejo de Fomento Turístico, CONFOTUR), to implement the guidelines of Ley No. 158-01 and to create the conditions and facilities needed for innovative tourism projects to qualify for the incentives granted by the law.
Decree No. 372-14 created CONFOTUR's Technical Office (Dirección Técnica), which handles all technical matters arising from the application of Ley No. 158-01 and its amendments.
Applications for Classification, in order to qualify under the terms of Ley 158-01 and its amendments, must be submitted through the CONFOTUR website by completing the Application Form. The Technical Office carries out the technical and legal evaluation of the projects and is responsible for recommending to the Council the exemptions applicable to each application it reviews.
A Classification, whether Provisional or Final, is simply the approval by the Tourism Development Council (CONFOTUR) of a given tourism project as eligible for the benefits and incentives of the Law.
Ultimately, all exemptions granted by CONFOTUR are established in Ley 158-01 and its amendments. Each project is evaluated by CONFOTUR's Technical Office following the guidelines of the law itself, its Implementing Regulations (Decree No. 372-14 dated October 9, 2014) and Resolution No. 109-15 of September 25, 2015, which approves the Guide for Submitting Tourism Projects to access the Incentives and Benefits of Ley No. 158-01.
Benefits?
Exemptions
- Income Tax (Impuesto Sobre la Renta, ISR).
- Taxes on the incorporation of companies and capital increases.
- Real estate transfers, whether by sale, swap, contribution in kind or any other form of transfer of real estate rights.
- Real Estate Property Tax (Impuesto al Patrimonio Inmobiliario, IPI).
- Import duties and the Tax on the Transfer of Industrialized Goods and Services (ITBIS) applicable to machinery, equipment, materials and movable goods needed for the construction, initial outfitting and start-up of the tourism facility.
- Full and absolute exemption for the machinery and equipment needed to achieve high product quality (ovens, incubators, production control treatment plants and laboratories, among others) at the time of setup.
Benefits
- Domestic and international financing granted to companies receiving these incentives, as well as the interest on such financing, will not be subject to any tax payment or withholding.
- They may deduct from their net taxable income the amount of their investments in tourism projects within the scope of this law, applying up to twenty percent (20%) of their net taxable income each year to the amortization of those investments. Under no circumstances may the amortization period exceed five (5) years.
- The establishment of new taxes, levies, fees, etc. is prohibited during the tax exemption period.
Important Considerations:
- The incentives and benefits will be strictly limited to new projects whose construction begins after this law is enacted.
- Any subsequent transfer in favor of third-party buyers is excluded from these benefits.
- All individuals or legal entities domiciled in the country that undertake, promote or invest capital in any of the activities listed in Article 3, and in the tourism hubs and/or provinces and/or municipalities described in Article 1 of this law, may qualify for the incentives and benefits.
- Likewise, individuals or legal entities that develop new projects or complementary offerings to those listed in Article 3, through a concession, lease or any other form of agreement with the Dominican State in the tourism hubs listed in Article 1 of this law, may qualify for the incentives and benefits of this law.
- The tax exemption period for each tourism project, business or company will be ten (10) years, starting from the date the construction and outfitting of the project receiving these incentives is completed.
Legal Basis: Ley 158-01, Art. 2, Art.4, paragraphs I to IV, Art. 5 and Art. 6.
