Confotur Law, don’t pay taxes for 15 years
If you want to buy a property in the Dominican Republic and it is located in
the mountains, beach or it is a tourist infrastructure such as a golf course,
aquarium, etc. There is a law that exempts these properties from the
payment of some taxes, it is called Law No. 158-01 or Law for the Promotion
of Tourism Development for poles with little development and new poles in
provinces and localities of great potential.
Tourism is an important industry worldwide and is one of the most important
job generators for the country, which is why the State wants to promote the
increase in activities that contribute to the tourism industry, encouraging real
estate, tourism and hotel development of developing areas.
How does it benefit tourism?
Law 158-01 or by its abbreviations CONFOTUR LAW, exempts from tax
commitments that in other types of properties you must pay, such as the
Transfer Tax and the IPI.
That is, if you are going to buy a project or property that is covered by the
CONFOTUR law, you would not have to pay 3% tax on the value of the
property when putting it in your name, just as said property will not be taken
in count when calculating the value of your real estate assets.
Does that mean you are exempt from paying IPI every year?
No, it means that this property will not be included in the calculation of the
real estate assets. If you have other properties and the sum of them exceed the exempt amount, you must pay 1% of the surplus to the current tax
exemption for that year.
The tax exemption period corresponding to each project, business or tourist
company will be ten (10) years, from the date of completion of the
construction work and equipment of the project object of these incentives.
Similarly, the law covers other types of tax exemptions for hotel facilities, resorts and / or hotel complexes, directly related to import taxes on machinery, materials and equipment for the renovation, improvement and
modernization of its facilities, for those properties that have a minimum of 5
years (demonstrable) of being built.
What types of properties are the state interested in and applicable to this
- Hotel facilities, resorts and / or hotel complexes.
- Construction of facilities for conventions, fairs, international conferences, festivals, shows and concerts.
- Companies dedicated to promoting cruise activities that establish, as the mother port for the origin and final destination of their vessels, any of the ports specified in this law.
- Construction and operation of amusement parks and / or ecological parks and / or theme parks.
- Construction and / or operation of port and maritime infrastructures at the service of tourism, such as marinas and marinas.
- Construction and / or operation of tourist infrastructures, such as aquariums, restaurants, golf courses, sports facilities and any other that can be classified as establishment belonging to tourist activities.
- Small and medium-sized companies whose market is mainly based on tourism (handicrafts, ornamental plants, tropical fish, breeding farms for small endemic reptiles and others of a similar nature). Basic service infrastructure companies for the tourism industry, such as aqueducts, treatment plants, environmental sanitation, garbage collection and solid waste.
Consult with a lawyer or your real estate agent if the property you are going
to acquire is guaranteed by this law, or if the project you want to start is
applicable for it. In this way, the state will benefit you with incentives that
will help you save a large tax burden for your investments and finances.
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