SANTO DOMINGO. - The Internal Taxes Agency announced the exemption of the obligation to retain the Income Tax (ISR) to foreign companies or people who offer professional services related to product development projects, materials and production processes, technology research and development, personnel training, innovation, investigation and environmental protection.

In a statement, it also said the people who offer all type  consulting services are exempt from the obligation, as Articles 47 and 48 Law 392-07 on Competitiveness and Industrial Innovation stipulate.

The Tributary Administration establishes the new disposition through the general norm 04-08 on Promotion of Industrial Innovation and Modernization, published today in the national press.

To adhere to the new disposition, those taxpayers must have PROINDUSTRIA’s Definitive Training Resolution available and formalize the exemption  request for obligation to retain the ISR before Internal Taxes, explicitly indicating the types of services to contract abroad, the estimated amount and duration; attaching to that request the signed contract or preliminary documents that show the intention of the parts to enter into the contract.

Once the Tributary Administration has received the request to authorize the exemption, it will have 60 days from the reception date to respond.

Other benefits

The new Norm, according to the statement, also applies to benefits for those industries regarding the renovation and modernization processes accepted in the transient state for five years, established in Article 50, of Law 392-07 on Competitiveness and Industrial Innovation.

Foreign people or companies will be able to depreciate in an accelerated manner, multiplying by two (2) percentage stipulated by the Tributary Code for machineries, the equipment and technologies acquired after becoming eligible.

They will also be able to deduce from the taxable net income the fiscal year when the investment in machinery, equipment and technology took place, up to the amount of said investment, not to exceed 50 percent of the taxable net income of the previous fiscal year.