Incentives to Promote Filmic Activity in Dominican Republic

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In the past years the cinematographic industry has had a great increase in the Dominican Republic, through the creation and development of a number of Dominican movies.

The law “Ley 108-10 para el Fomento de las Actividades Cinematográficas en la República Dominicana”, (from now on the Law), which has as a main objective: the promotion of national filmic productions development, along with its Application Regulation No. 370-11.

In this sense, chapter VI of the Law “Regimen of Stimulation of Filmic Activity in the country”, talks about the incentives and requirements to benefit from them.

From the stimulations given by the Law we can find ones of fiscal character, within which we have the following:

  • The right to deduce or calculate 100% of the real value invested for the Income Tax (ISR) calculation on their charge, corresponding to the taxable period in which the investment is made, those legal entities that make investments in cash to Dominican feature filmic projects previously approved by the Dirección General de Cine (DGCINE)1. It is important to point out that legal people or entities that produce filmic feature works, duly approved by the DGCNIE, and when it has been verified that at least 50% of the shooting of the film has been made in Dominican territory, they will benefit from this incentive.
  • The producers, distributors of feature films rent in national or foreign territory, and exhibitors, that capitalize or reserve to develop new productions or investments in the filmic sector, will be free from up to 100% of the value of the Income Tax (ISR), for a term of 10 years from the validity of the Law.
  • The donations are deductable up to 15% of the net taxable income of the period.  The producers, distributors of Dominican feature films and exhibitors benefit from an exemption of 100% of the Income Tax (ISR) by reserving or capitalizing their income to invest in the film industry.  Dominican Republic offers a Tax Credit equal to 25% of all the prone to qualification expenses in Dominican Republic. This credit can be applied against the Income Tax (ISR).
  • Legal people or entities that make capital investment in the construction of movie theaters in the Distrito Nacional and Santiago will be exonerated from 50% of the Income Tax (ISR) for a period of 15 years for the concept of income generated by the corresponding rooms in the movie theatres. Likewise, they are exonerated from national and municipal taxes collected by the issuance of construction permissions including the property sales document during a period of 5 years, counting from the date of validity of the Law, as well as the import taxes and other taxes like rates, rights, recharges, including the tax for transfer of industrialized goods and services: Impuesto a la Transferencia de Bienes Industrializados y de Servicios (ITBIS), that are applicable on the equipment, materials and furniture necessary for the first equipment and operation of the corresponding movie room, for a period of 5 years counting from the date of validity of the Law.

 

Finally, to qualify as a beneficiary of the before mentioned incentives, there has to be a compliance of the following requirements:

  • Have a Filming Permission;
  • Have the corresponding insurance policy that responds to cases of damages and infringements;
  • Registered before the Information Sistem and Registry of Dominican Cinema: Sistema de Información y Registro Cinematográfico Dominicano (SIRECINE), except foreign movies that will only have to comply with the first two requirements above mentioned;
  • That 20% of the budgeted amount for the movie or audiovisual work to be developed, is spent in Dominican Republic or that the invested Dominican capital is not below 20% of its budget; and,
  • Count with a minimum participation of Dominicans, in accordance with the Law2.

 

Oficina Bisono is proud to participate as legal consultant in the cinematographic industry. For consultation about this topic contact us: mbisono@oficinabisono.com; mtaveras@oficinabisono.com; info@oficinabisono.com

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