Dominican Aviation Law Tax Incentives

Dominican Law 57-23, creating a tax incentives regime for civil commercial aviation both national and international was enacted by the Dominican President on October 7, 2023.

The purpose of Law 57-23 is to create a tax incentives regime to civil commercial aviation in the Dominican Republic, with the purpose of promoting and increasing the competitiveness of DR civil aviation, promoting the increase of airline visitors to Dominican Territory and establish new domestic and international routes from and to strategic markets in the Dominican Republic.

It also seeks to strengthen the positioning of the Dominican Republic as a connection point for the transportation, passenger and cargos logistics, commercial and international investment.

The Law establishes in favor of national and international air transport operators that meet with the requirements provided in the law the following tax incentives:

1) Total exemption from the withholding for concept of payment of income abroad for leasing of aircrafts or aircraft engines and the aircraft maintenance or repair services; engines parts and other parts of aircrafts.

2) Withholding of single and definitive form of only the five percent (5%) of the tax for concept of payment abroad for training and continuing education to the onboard 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) in the sale of complete flights by Dominican operator companies to companies abroad (charter), as long as they are flights originating abroad with destination to the Dominican Republic.

4) Exemption from payment of customs tariffs and ITBIS over the import of vessels and air vessels of the tariff schedules 8802.30.00 corresponding to airplanes and other air vessels, of empty weight over 2.000 kg, but less or equal than 15.000 kg and the tariff schedule 8802.40.00 corresponding to airplanes and other air vessels, of empty weight greater than 15.000 kg.

5) Exemption from payment of the Tax on Assets declared before the Dominican General Internal Tax Administration (DGII).

Law 57-23 grants the Civil Aviation Board (JAC) the power to receive the requests and evaluate the files of the companies interested in obtaining the tax incentives of such law, as well as recommend to the Dominican President the approval of the granting of such benefits, after the previous no objection of the Ministry of Finance.

ABOUT THE AUTHOR: Dr. Felipe Isa Castillo is a Partner, Head of International Business, Foreign Investment & Real Estate at ACLAW, a law Firm in the Dominican Republic. He specializes in international business, foreign investment and real estate law (International Legal Studies LLM in Georgetown University Law Center & Masters in International Business in Universidad Pompeu Fabra in Spain) with more than 20 years of experience in International Business and Trade, Foreign Investment, Free Trade Zones and Cross Border Real Estate practice. Dr. Felipe Castillo is also a Certified Bankruptcy Conciliator and Liquidator and Legal Interpreter.

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Disclaimer: This publication is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. For specific technical or legal advice on the information provided and related topics, please contact the author.