Dominican Republic: New tax incentives for commercial civil aviation
Tax incentives would only be applicable to national or foreign air operators that have a permanent establishment in the country
New tax incentives for commercial civil aviation
The Executive Branch enacted Law no. 57-23 that establishes a regime of new tax incentives for national and international commercial civil aviation.
The new tax incentives are only applicable to national or foreign air operators that have a permanent establishment in the country. Moreover, certain limitations are imposed on transactions with jurisdictions that are considered to be of low or nil taxation (e.g., tax havens).
The table below provides a summary of the tax incentives.
Tax incentives for civil aviation |
|
Tax concept |
Taxes, fees, or exemptions |
Payments abroad for aircraft and engine aircraft leasing |
Total exemption from income tax withholding |
Payments abroad for aircraft maintenance and repair services |
Total exemption from income tax withholding |
Payments abroad for crew training |
One-time, reduced income tax withholding of 5% |
Inbound flights to the Dominican Republic, where a Dominican operating company sells the complete flight to a foreign entity (charter) |
Exemption from 18% value added tax (VAT) |
Import of aircraft with subheadings 8802.30.00 and 8802.40.00 |
Tariffs and VAT |
1% tax on assets |
Exempt |
Read a December 2023 report [PDF 209 KB] prepared by the KPMG member firm in the Dominican Republic
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