Tuesday, July 29, 2008

TAX INCENTIVES TO COMPANIES BASED ON LAW OF COMPETITIVENESS AND INDUSTRIAL INNOVATION

http://almomento.net/news/128/ARTICLE/14296/2008-07-22.html

Tuesday, July 22, 2008 14:39:00.

Directorate General of Internal Taxes (Dirección General de Impuestos Internos) (DGII) announces tax incentives to companies based on Law of Competitiveness and Industrial Innovation.

Santo Domingo .- The Dirección General de Impuestos Internos (DGII) (Directorate General of Internal Taxes) announced on Tuesday a series of tax incentives designed to benefit a set of professional companies.

These tax incentives include exemption from the obligation to withhold income tax (Impuesto Sobre la Renta) (ISR) to taxpayers, foreign natural or legal persons, that offer professional services related to development projects of products, materials, and production processes, research and development of technology, personnel training, innovation, research, training and environmental protection.

DGII points out through a document sent to ALMOMENTO.NET that the persons who offer any kind of consulting services and/or technical advice are also exempted from that obligation as stated under Articles 47 and 48 of Law 392-07, on Competitiveness and Industrial Innovation.

To comply with the new provision, the said taxpayers must have the Resolución de Calificación Definitiva (Resolution of Final Qualifying) of PROINDUSTRIA, and they have to formalize the request for exemption from the obligation to withhold income tax (Impuesto Sobre la Renta) (ISR) to the Directorate General of Internal Taxes (DGII), stating explicitly the kinds of services to be contracted abroad, the estimated amount and duration of them; attaching to that request the signed contract or the preliminary documents proving the intention of the parties for the contracting procedure.

Once the Tax Administration (DGII) has received the request for exemption, it will have 60 days from the date of receipt thereof to answer it.

Other benefits.

The new Standard, as the DGII document explains, also grants benefits for those industries with regard to the processes of renewal and modernization assumed on the five-year transitional regime, established under Article 50 of Law 392-07, on Competitiveness and Industrial Innovation .

The foreign natural or legal persons may depreciate at an accelerating rate, multiplying by two (2) the rates stipulated by the Tax Code for machinery, equipment and technologies acquired after being qualified.

They may also deduct from net taxable income of the fiscal year in which the investment in machinery, equipment and technology was made up to the amount of such investment not exceeding 50% of its net taxable income of the previous fiscal year.