Dominican Republic: Tax incentives for industries subject to competitiveness and innovation regime

Dominican Republic: Tax incentives for industries

Measures announced by the executive branch provide additional tax incentives as support for companies operating under the competitiveness and innovation (“PROINDUSTRIA”) regime.

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The new tax incentives allow eligible companies to elect one of the following incentives during a 90-day period prior to the date for filing their corporate income tax return (Form IR-2):

  • Renewal of the 50% deduction on value added tax (VAT) allowed for imports of raw materials, equipment, and capital goods
  • Expansion of the scope of raw materials, capital goods, equipment, and machinery that may be subject to a zero rate (0%) customs tariff
  • A six-month period for eligible companies to submit requests for reimbursement grants from the Dominican tax authority (DGII) for the amount equal to the tax credits generated by the transfer of VAT-exempt finished goods to physical person or legal entities

There are other incentives being made available including the ability to renew for up to 15 years, a provision to update and modernize classified industries; a process aimed at encouraging the transformation of raw materials and the use of capital goods, equipment, and machinery when after the transformation process, the resulting product is goods or equipment that qualifies under a different tariff code.

Read a January 2021 report [PDF 185 KB] prepared by the KPMG member firm in the Dominican Republic

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