President Fernández recently signed into law the incentive for renewable energy bill. This new law provides tax and duties incentives on alternative energy imports and facilities for research and application of renewable energy technologies. eliminates former law 2071, opening the Dominican Republic for the development of alternate energy sources. The new law’s incentives, in effect under the regulation of the National Energy Commission, include the following:
(a) 100% exemption over import duties for equipment, machinery and accessories required for renewable energy production.
(b) 100% exemption over sales tax (ITBIS), for all previously mentioned equipments.
(c) 100% 10-year exemption over income tax, for companies or individuals benefited by this law until year 2020.
(d) Reduction to a fixed 5% on the tax over foreign financed interest payments, modifying Art. 306 of the Dominican Tax Code for the beneficiaries of this new law.
(e) Up to a 75% credit on capital cost of equipment required by owners or renters of family homes and commercial or industrial establishments who shift entirely to renewable energy systems or increase their energy consumption share in these. This tax credit will be deferred to the consumer’s income tax for the next 3 years, discounted at a proportion of 33.33% per year.
This new bill also calls for the creation of a CO2 emission’s bond market under the platform of the Kyoto Protocol, regulated by the Ministry of Natural Resource’s Mechanism of Clean Development.