Could the new aviation law potentially lead to cheaper air tickets for flights to and from the DR?

Punta Cana, RD. – The new «Law for the Promotion and Competitiveness of Civil Aviation» enacted by President Luis Abinader, can it help the growth of the country’s aeronautical sector and lower the price of air tickets?

For his part, the general director of the Dominican Institute of Civil Aviation, Héctor Porcella, assures that yes, since law 57-23 on the Promotion and Competitiveness of Civil Aviation, recently enacted, creates a regime of tax incentives for national and civil aviation. international.

This will make the Dominican Republic one of the most attractive destinations for international investment, helping to boost the economy and create new jobs in different parts of the national territory.

They explain that the tax incentive regime for commercial aviation has the purpose of improving the competitiveness of the aeronautical sector, promoting the sustainable growth of visitor arrivals by air, and establishing new domestic and international routes to and from strategic markets in the Dominican Republic.

Main scope of the new Civil Aviation Law

Law 57-23, which creates a regime of tax incentives for national and international civil aviation, establishes the following provisions:

1) Total exemption from withholding tax for income payments abroad for the lease of aircraft or aircraft engines and aircraft maintenance and repair services; engine parts and other aircraft parts.

2) Single and definitive withholding of only 5% of the tax for payments abroad for training and training of crew personnel, by non-residents; use and maintenance of computer programs and software related to the operation of the aircraft and the insurance of the aircraft.

3) Exemption from payment of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) in the sale of complete flights by Dominican operating companies to companies abroad (chartering), as long as they are flights originating abroad to the Dominican Republic.

4) Exemption from payment of Tariff and ITBIS on the importation of ships and aircraft of subheadings 8802.30.00 corresponding to airplanes and other aircraft, with an empty weight exceeding 2,000 kg, but less than or equal to 15,000 kg and subheading 8802.40.00 corresponding to Airplanes and other aircraft, with an empty weight exceeding 15,000 kilograms.

5) Exemption from payment of Tax on declared Assets in the General Directorate of Internal Taxes (DGII).

Furthermore, the enacted law confers on the Civil Aviation Board the function of receiving applications and evaluating files of companies interested in benefiting from the tax incentives of said regulations, as well as recommending to the Executive Branch the approval of the granting of these benefits, subject to no objection from the Ministry of Finance.

This new regulation seeks to promote the development of international civil aviation to and from the Dominican Republic, following the guidelines drawn up by the Organization of International Civil Aviation (ICAO) containing international standards, recommended practices and procedures that govern the sector.

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