Dominican Republic Strengthens Tax Credit Film Incentive
BUENOS AIRES -- With the aim of strengthening the local film industry, the Dominican Republic promulgated Law 82-13, which solidifies and improves the existing film incentive framework by expanding the scope, term and liquidity of the competitive 25 percent tax credit on all above- and below-the-line expenditures related to the production of feature films and TV series.
Announced last Friday, the new legislation is expected to generate direct and indirect economic output exceeding $1.2 billion, as well as creating more than 25,000 new jobs, within the next five years.
The new setup includes a 100 percent income tax deductibility for Dominican corporate taxpayers of their investments in eligible Dominican film production companies, with a maximum direct offset of 25 percent of their year income tax liability. This provision alone is expected to generate a significant funding base for eligible Dominican film productions, which must adhere to certain cultural requirements, such as a Spanish-language majority and production location in the DR.
Finally, a substantial long-term 100 percent income tax exemption, for a period of up to 15 years, is granted to investors promoting the development of new industry-related infrastructures (studios, movie theaters, etc.), and to distribution and technical service providers who will establish their business in the country.
Earlier this year, the Dominican Republic film industry received a strong input when the International Finance Corporation, a member of the World Bank Group, announced a direct investment of $20 million in Dominican-based company Indomina Group, in addition to facilitating $10 million through a loan syndication placed in the international banking market.
Indomina is currently undergoing a $70 million construction of Pinewood Indomina Studios in the Dominican Republic and will reach a total invested value in the state-of-the-art infrastructure of $70 million once the construction of the first phase is completed by the end of this year. The studio’s brand-new 60,500-square-foot water effects facility was inaugurated a few weeks ago by Indomina chairman Felipe Vicini, together with DR president Danilo Medina and Rt. Hon. Hugo Swire, minister of the U.K. Foreign Office.
"The competitiveness of the Dominican Republic as a preferred film and TV production destination is a result of an array of the fiscal measures offered in the country," said Vicini, who added that this set of film incentives is a key component to allow film and TV content producers to partially finance their projects.