Global

Details

  • Service: Tax, Global Indirect Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/13/2014

Dominican Republic - Film incentives include tax credit, exemptions 

May 13:  The Dominican tax authorities—along with the Dominican film commission and others involved in the management of the film industry in the Dominican Republic—held several meetings in April 2014 to focus on how best to communicate with film producers about the incentives available under law no. 108-10.

Ley no. 108-10 is the law containing the film industry provisions.

Transferable tax credit, VAT exemption incentive

Law no. 108-10 provides a transferable tax credit equal to 25% of all expenses incurred in the Dominican Republic and related to the pre-production, production, and post-production of films, provided certain conditions are satisfied:


  • The transferable tax credit is only available for Dominican taxpayers. Thus, to qualify for this tax credit, foreign producers must either engage a domestic production agency that is registered with the film commission in the Dominican Republic, or incorporate a legal entity in the Dominican Republic and then obtain a commercial certificate and a national tax identification number for that entity.
  • A “shooting permit” is required (currently provided by the film commission).
  • Foreign film projects must comply with minimum Dominican personnel requirements—i.e., employment requirements ranging from 10%, 20% or 25%.

A second tax incentive under Law no. 108-10 is that the transfer of goods and services directly related to the production of films in the Dominican Republic is exempt from value added tax (VAT).

Summary of other tax incentives, tax exemptions

In general, additional tax incentives for film production activities in the Dominican Republic provide for the following:


  • An income tax deduction (100%) of the amount invested with respect to the film for the tax period in which the investment is made (applicable only for “local investments”)
  • An income tax exemption (100%) for producers and distributors of Dominican films
  • An income tax exemption (50%) related to the construction of cinema houses located either in Santo Domingo or Santiago, and a 100% exemption for the construction of cinema houses in other provinces and municipalities
  • Exemption from building permit taxes and property sales recordation taxes for certain cinema construction projects (as decribed above)
  • VAT exemption (100%) with respect to the production of foreign movies in the Dominican Republic
  • Income tax exemption for technical services related to the film industry in the Dominican Republic

To claim these tax exemptions provided under law 108-10, in addition to claiming the transferable tax credit and VAT exemption incentive, film producers must provide the Dominican tax authorities with a detailed budget of the film project in advance of filming or production.

Film commission’s report

The Dominican Republic film commission in February 2014 issued a report—known in English as the “Dominican Republic film incentives, 25% tax credit”—that describes incentives available for those making films and movies in the Dominican Republic.


The film commission’s report not only describes the Dominican Republic as an attractive locale for foreign producers of films (for example, it includes descriptions of waterfalls, rainforests, and beaches) but also notes the presence of high quality production services that, combined with tax incentives, may afford opportunities to those in film productions.


The report also provides a summary of the Dominican Republic’s film industry law.


For more information, contact a KPMG tax professional in the Dominican Republic:


José Manuel Romero

+ 809-566-9161 Ext.1303




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now