CONFOTUR

On October 9, 2001, the National Congress approved Law No. 158-01 on the promotion of tourism development for underdeveloped areas and new areas in provinces and localities of great potential, with the objective of accelerating a rationalized process of development of the tourism industry in all regions with potential and natural conditions for tourism exploitation throughout the Dominican territory .

The aforementioned law created the Tourism Development Council (CONFOTUR), with the purpose of applying the guidelines of Law No. 158-01, as well as creating the necessary conditions and facilities so that innovative tourism projects may benefit from the incentives granted by the law.

Decree No. 372-14 created the Technical Directorate of CONFOTUR, in charge of handling all technical matters derived from the application of Law No. 158-01 and its amendments.

The classification application files , in order to benefit from the terms of Law 158-01 and its amendments, must be sent through the CONFOTUR web page by completing the Application Form. The Technical Direction will carry out the technical and legal evaluation of the projects and will be in charge of recommending to the Council the exemptions for each application it evaluates.

A Classification, whether Provisional or Definitive, is nothing more than the approval by the Tourism Development Council (CONFOTUR) of a given tourism project as eligible for the benefits and incentives of the Law.

In short, all exemptions granted by CONFOTUR are established in Law 158-01 and its amendments. Each project, is evaluated by the Technical Directorate of CONFOTUR following the guidelines of the same law, its Implementing Regulations (Decree No. 372-14 dated October 9, 2014) and Resolution No. 109-15 dated September 25, 2015 which approves the Guide for the Presentation of Tourism Projects to access the Incentives and Benefits of Law No. 158-01.

Benefits?

Exemptions

1. Income Tax (ISR).
2. Taxes on incorporation of companies and capital increase.
3. Transfer of real estate, through sales, exchanges, contributions in kind and any other form of transfer of real estate rights.
4. Real Estate Wealth Tax (IPI).
5. Import taxes and the Tax on the Transfer of Industrialized Goods and Services (ITBIS), applicable on machinery, equipment, materials and personal property necessary for the construction and for the first equipment and start-up of the tourist facility.
6. Total and absolute exemption of machinery and equipment necessary to achieve a high profile in product quality (ovens, incubators, production control treatment plant and laboratories, among others), at the time of implementation.

Benefits

1. National and international financing, as well as the interest thereon, granted to the companies that are the object of these incentives will not be subject to any tax payment or withholding.
2. They may deduct or deduct from their net taxable income the amount of their investments in tourism projects included within the scope of this law, being able to apply to the amortization of such investments up to twenty percent (20%) of their net taxable income, each year. In no case may the amortization term exceed five (5) years.
3. It is forbidden to establish new tax charges, taxes, rates, fees, etc. during the tax exemption period.

Important Considerations:

• The incentives and benefits will be strictly limited to new projects whose construction begins after the enactment of this law.
• Any subsequent transfer in favor of third party acquirers is excluded from such benefits.
• All individuals or legal entities domiciled in the country that undertake, promote or invest capital in any of the activities indicated in article 3 and in the tourist poles and/or provinces and/or municipalities described in article 1 of this law shall be eligible for the incentives and benefits.
• Likewise, individuals or legal entities that develop new projects or complementary offers to those contained in Article 3, by concession, lease, or any other form of agreement with the Dominican State in the tourist centers listed in Article 1 of this law, may avail themselves of the incentives and benefits of this law.
• The tax exemption period corresponding to each tourism project, business or enterprise will be ten (10) years, as of the date of completion of the construction and equipment works of the project that is the object of these incentives.

Legal Basis: Law 158-01, Art. 2, Art. 4, paragraphs I to IV, Art. 5 and Art. 6.