Local October 8, 2023 | 9:11 am

Abinader promulgates a law creating a tax incentive regime for commercial, civil aviation

Abinader promulgates law that creates tax incentive regime for commercial civil aviation

Santo Domingo.- The President of the Republic, Luis Abinader, enacted this October 6 Law No. 57-23, which creates a regime of tax incentives for national and international commercial civil aviation.

The purpose of this regulatory provision is to create a regime of tax incentives for commercial civil aviation in the Dominican Republic to promote and increase the competitiveness of civil aviation in the country, promote the increase of visitors to the national territory by air, establish new domestic and international routes to and from strategic markets of the Dominican Republic.

Likewise, to strengthen the positioning of the Dominican Republic as a connection point for transportation, passenger and cargo logistics, trade, and international investment.
The regulation above contemplates the following tax incentives in favor of the national and international commercial air transportation operating companies that comply with the requirements outlined in the law:

President Luis Abinader seeks to increase the country’s competitiveness in aviation. PHOTO External source

1) Total exemption from withholding tax on foreign income payments for the lease of aircraft or aircraft engines and aircraft maintenance and repair services; engine parts and other aircraft parts;
2) Single and definitive withholding of only five percent (5%) of the tax on payments abroad for training and qualification of crew personnel by non-residents; use and maintenance of computer programs and software related to the operation of the aircraft and for the insurance of the aircraft;
3) Exemption from the payment of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) on the sale of complete flights by Dominican operating companies to companies abroad (charter), as long as the flights originate abroad and are destined for the Dominican Republic;

4) Exemption from the payment of Tariff and ITBIS on the importation of ships and aircraft of the subheadings 8802.30.00 corresponding to airplanes and other aircraft of weight in emptiness superior to 2,000 kg, but inferior or equal to 15,000 kg and the subheading 8802.40.00 corresponding to airplanes and other aircraft of weight in vacancy excellent to 15,000 kg;
5) Exemption from paying the Tax on Assets declared in the General Directorate of Internal Taxes (DGII).

The enacted law confers to the Civil Aviation Board the function of receiving the applications and evaluating the files of the companies interested in availing themselves of the tax incentives of said regulation, as well as to recommend to the Executive Power the approval of the granting of these benefits, prior no objection from the Ministry of Finance.
The regulation above, which will become effective from its publication in the Official Gazette, promotes the development of international civil aviation within the context of the guidelines issued by the International Civil Aviation Organization (ICAO), which contain the standards, recommended methods, and international procedures for the benefit of the sector.

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