CONFOTUR Law 158-01: what it is and what it covers
The Dominican tourism incentive law can exempt taxes for 15 years. What it covers, who benefits and how to check it.
Law 158-01 on Tourism Development, known as the CONFOTUR Law, is how the Dominican Republic attracts investment to its tourist areas. It has been amended several times (including by laws 184-02, 318-04 and 195-13) and is administered by the Tourism Development Council (CONFOTUR), part of the Ministry of Tourism.
Which exemptions it includes
According to the Ministry of Tourism, qualifying tourism projects may be exempt from:
- Income tax on the tourism activity.
- Real estate transfer taxes and company-formation taxes.
- Real estate wealth tax (IPI).
- Import duties and VAT (ITBIS) on the machinery, equipment and materials needed to build and fit out the project.
In addition, project financing and its interest carry no withholding tax.
How long it lasts
The benefits last 15 years, counted from the end of construction. The project has 3 years to start operating.
What a home buyer gains
For anyone buying a unit directly from the developer in a classified project, the DGII recognises two exemptions:
- Transfer tax (normally 3% of the value).
- IPI, the annual real estate wealth tax.
These exemptions are processed through the Ministry of Finance, which refers them to the DGII. They do not pass to later buyers: if you sell the home in the future, the new owner pays the usual taxes.
Provisional and final classification
A project first obtains provisional classification, which lets it build and sell with the benefits. Once construction is complete and inspected, it receives final classification.
How to check it
Ask the developer for the CONFOTUR classification resolution and check the project name and date. If a project is only "eligible" or "in process", the benefits are not yet guaranteed.
At Caribea we tell you the status of each project and share the resolution as soon as we have it.
This guide is for information only and is no substitute for professional legal or tax advice. Rules and figures may change.
