In the Dominican Republic, free trade zones play a crucial role in economic development and the promotion of exports. Companies established within these zones benefit from a series of tax and customs exemptions that allow them to operate with greater competitiveness. Below are the most relevant free trade zone tax exemptions that benefit operators and companies within these zones.
Income Tax Exemptions
Benefits for Companies
Companies operating in free trade zones are exempt from paying Income Tax, as established by Law No. 5911 of May 22, 1962, and its subsequent amendments. This exemption applies to all corporations, allowing greater reinvestment of profits into business growth and development.
Exemption from Construction and Transfer Taxes
Free trade zone operators are also exempt from paying taxes related to construction, loan agreements, and the registration and transfer of real estate. This exemption applies from the moment the operator is incorporated, facilitating infrastructure expansion within free trade zones.
Municipal and Import Taxes
Exemption from Municipal Taxes
Activities carried out within free trade zones are not subject to municipal taxes that may be imposed, significantly reducing operating costs for companies.
Import Tax Exemptions
Companies in free trade zones benefit from exemptions on all import taxes, tariffs, customs duties, and related charges. This includes raw materials, equipment, construction materials, and other inputs required for the construction, setup, and operation of free trade zones.
Export and Other Tax Exemptions
Export Taxes
Companies are not subject to export or re-export taxes, encouraging the production and commercialization of goods for international markets.
Business License Tax and ITBIS
Additionally, free trade zones are exempt from business license taxes, asset or net worth taxes, as well as the Tax on the Transfer of Industrialized Goods and Services (ITBIS). These exemptions reduce the overall tax burden and promote reinvestment within the company.
Consular Fees and Employee Welfare Equipment
Exemption from Consular Fees
All imports destined for free trade zone operators or companies are exempt from consular fees, simplifying and reducing the cost of import procedures.
Exemption for Employee Welfare Equipment
Companies may import, tax-free, equipment and supplies required for the installation and operation of employee cafeterias, healthcare services, childcare facilities, and other employee welfare services.
Transportation Equipment
Transportation Vehicles
Free trade zone companies may import cargo vehicles, garbage collection vehicles, microbuses, and minibuses for employee transportation without paying import taxes, subject to prior approval by the National Council of Free Trade Zones of Export. These vehicles may not be transferred for a minimum period of five years.
Procedure for ITBIS Exemption
Application and Renewal of the ITBIS Exemption Card
To apply for or renew the ITBIS exemption card, free trade zones must submit their request through the Ministry of Finance. This card, valid for one year, is issued exclusively to export free trade zones operating under Law No. 8-90. The Ministry of Finance processes the request with the DGII, once the corresponding authorization is granted.
Replacement Due to Loss of the Card
In case of loss of the ITBIS exemption carda signed and stamped request letter must be submitted, along with a payment receipt and a loss certification issued by the National Police, at the Taxpayer Assistance Center or the information desk of the nearest Local Tax Administration office.
Conclusion
The tax and customs exemptions granted to operators and companies within free trade zones in the Dominican Republic are a key incentive for investment and economic development. These benefits allow companies to reduce operating costs, reinvest in growth, and compete in international markets—positioning the country as an attractive destination for industry and trade.
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