TAX INCENTIVES TO RENEWABLE ENERGIES
Through Law No. 57-07, the Dominican Republic consolidates its efforts to increase its unconventional energy diversity, with the main objectives of reducing dependence on imported fossil fuels, stimulate private investment projects, developed from renewable sources of energy, and essentially, reduce the negative environmental impact caused by energy operations with fossil fuels.
For these purposes, the law establishes a special tax incentive for the benefit of companies and individuals that develop projects dedicated to the production of energy from renewable resources. This incentive consists of the following aspects:
a) Exemption from Income Tax for a period of ten years from the start of operations, and with validity until 2020.
b) Reduction to 5% of the tax on external financing, established at 25% in Article 306 of the Tax Code.
c) Exemption of up to 75% for self-producers in the cost of investment in equipment, as a single credit to income tax. Said tax credit will be discounted in the three years following the annual income tax to be paid by the beneficiary thereof in proportion to 33.33%.
d) Certificates and / or bonds for reduction of polluting emissions, which will belong to the owners of said projects for their commercial benefit.
e) 100% exemption from import taxes, Transfer Tax on Industrialized Goods and Services (ITBIS) and all final sales taxes applicable to equipment, machinery and accessories necessary for the production of energy from renewable sources .
f) Access to financing funds at the lowest market rates for an amount of up to 75% of the total cost of the work and its installation, for the benefit of community projects that want to develop renewable energy sources on a small scale (up to 500Kw).
In order to be beneficiaries of this law, the projects must demonstrate their physical, technical, environmental and financial viability, such as wind farms and isolated applications of windmills, micro, small and / or hydroelectric installations whose power does not exceed 5 MW, electro solar and thermo solar installations, power plants that use primary biomass, energy farms, agro-industrial plantations or infrastructures exclusively for the production of biomass for energy consumption, ocean energy exploitation facilities and thermal-solar installations of medium temperature dedicated to obtain domestic hot water and air conditioning in association with absorption equipment for cold production.