Dominican film law
With the aim of stimulating the development,
production, dissemination and preservation of
Dominican films, as a mean of communication
and cultural diversity and as an activity of great
economic potential, the Dominican government
enacted Law No. 108-10, the Film Industry
Law. This Law is necessary because without
incentives and protection, domestic films have
historically faced numerous economic and
structural barriers that have considerably
affected their competitiveness. Thus, this Law
was passed, recognizing that the Dominican
territory is privileged and should be promoted
as a stage for local and foreign films, so that a
lucrative industry emerges that contributes to
the national economy and encourages foreign
investment.
One of the goals of the Dominican Republic’s new Film Industry Law was to modify the country’s tax system so that it stimulates the film industry and encourages domestic and foreign investment in the industry. Toward that end, the Film Industry Law contains a number of tax incentives for the film industry itself, and for domestic and foreign investment in the industry.
Another income tax benefit is available for producers and distributors of films in the Dominican Republic. This tax benefit provides that income that is capitalized or reserved for new films or investments in films is completely exempt from income tax. In addition, income earned by individuals or businesses domiciled in the Dominican Republic for providing technical services for all films that are shot in the country are exempt from income tax.
Moreover, all foreign films produced in the Dominican Republic are exempt from paying the value-added tax applicable to the transfer and importation of most goods and services (“ITBIS”). Foreign films also are essentially exempt from all other municipal taxes with respect to filming, film equipment, and general production, except for taxes relating to the National Film Information Registry.
For one thing, investors in Dominican feature film projects approved by the newly created General Directorate of Films may deduct 100 percent of their investment for purposes of calculating their income tax for the period in which the investment is made, subject to a cap of 25 percent of the income tax otherwise payable.
These film industry tax incentives are available to any individual or companies that administer, promote, or develop films and other audiovisual works that meet the following minimum requirements:
1. Obtain a filming permit, which is issued at no cost by the General Directorate of Films for a period of 10 years;
2. Have an insurance policy covering civil liability in case of damages caused to third parties;
3. Spend 20 percent of the amount budgeted for the motion picture or other audiovisual work to be developed in the Dominican Republic, or have a budget consisting of at least 20 percent of Dominican capital; and
4. Have a minimum participation of Dominicans, although that requirement can be reduced by the General Directorate of Films if the country cannot meet the demand for personnel with the necessary training.
The law also provides that funds that are generated by taxes on film-related goods and services are to be channeled back to the film industry.
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