Noviembre 26, 2012
1. What tax incentives does the Film Law provide?
The Dominican Film Law provides the following tax incentives:
-To the investment in Dominican Feature Film
-For the reinvestment in the Cinematographic Industry
-For the establishment of Movies Theatres
-Tax Credit for feature films and other audiovisual works
-VAT (ITBIS) exemption for the pre-production, production and post-production of audiovisual works
-To the establishment of filming and recording studios
For more details refer to Law No. 253-12.
2. How do I apply for the Technical Service Provider incentive?
Technical Service Providers, as well as any other agent, should first obtain a Certificate of Registration at the National Registry of Cinematographic Agents. Application is filed at the DGCINE (Dominican Film Commission) by completing the corresponding form and providing the documentation requested therein. Once documents are correctly filed, the issuance of the Certificate may take approximately 10 days. This certificate will be valid for four (4) years.
Thereafter, the provider applies for the Certificate of Registrations at the Fiscal Registry of Cinematographic Agents and Providers, which is also issued by the DGCINE. Application is also filed at the DGCINE by completing the corresponding form and providing the information requested therein.
Moreover, the DGCINE submits the request to the Tax Authorities for approval, prior to issuing the Certificate of Registrations at the Fiscal Registry of Cinematographic Agents and Providers. This certificate is valid for 1 year.
Once provided with the Certificate of Registrations at the Fiscal Registry of Cinematographic Agents and Providers, providers may apply for the qualification as exempt technical service providers. Applications are filed at the Council for the Promotion of the Cinematographic Activity in the Dominican Republic (CIPAC), through the DGCINE.
The application should include the following:
a) Application letter or the corresponding form provided by the DGCINE.
b) Copy of the applicants’ ID, in case it is a person.
c) Copy of the latest Shareholders Meeting Minutes, designating the administrators of the company and copy of the representatives’ ID.
d) Certificate of Registrations at the Fiscal Registry of Cinematographic Agents and Providers, issued by the DGCINE.
e) Certification issued by the Dominican Tax Authorities indicating that the company is in compliance with its fiscal obligations.
f) Audited Financial Statements corresponding to the last fiscal year, reflecting the fixed assets of the provider.
g) Description of the technical services.
h) Sworn Declaration of the provider legalized by a Public Notary whereby applicant declares that it is not affected by the incompatibility provided in article 180 of the Regulation, which indicates that the Technical Service Provider may not serve other audiovisual productions, including television productions, artistic, adverting and/or events.
After the application is duly filed, the DGCINE will proceed with the evaluation, followed by an inspection of the applicant’s facilities and will then issue its recommendations to the CIPAC. The latter will issue a resolution approving or rejecting the qualification within a period of 30 days (the Qualification Resolution).
For further information please refer to the Tax Incentives for Film Tecnical Service Providers.
3. Do I need a permit to shoot in the DR?
A Shooting Permit is required for the application of tax incentives directed towards the production of films and audiovisual works. Additionally, such permit allows for the temporary import for a period of 6 months, extendable, of equipment necessary for filming. This permit is issued by the DGCINE.
4. Which expenses qualify for the tax credit?
According to article 167 of the Film Law Regulation, those expenses directly related to the preproduction, production and postproduction of a film or audiovisual project for purposes of obtaining the tax credit are the following:
-Development and pre-production costs of film and audiovisual works
-Construction and operation scenarios costs, purchases or rentals of costumes, accessories, food, office supplies, transportation, equipment and related services
-Executive production services costs for film and audiovisual works
-Salaries of the cast, technicians and musicians
-Costs of photography, sound synchronization, lighting and related services
-Editing costs, graphics, visual effects, animation, music and other post-production services
-Film processing costs, formats transfers and related services
-Rents and charges for use of facilities and locations in national territory
-Car rental for cast and technicians
-Accommodation and food costs for cast and technicians
-Flights to and from the Dominican Republic as well as domestic flights, engaged through a agency or airline whose principal office is located in the Dominican Republic
-Insurance, bonds and guarantees, as long they are engaged with companies whose principal office is located in the Dominican Republic
-Freight costs for equipment and supplies to and from the Dominican Republic
-Other direct production costs according to accepted practices of the Film Industry
5. Are below the line and above the line expenses treated differently, when applying for Film Law incentives?
In Dominican Republic there is no distinction between below the line and above the line expenses. Nevertheless, article 168 of the Film Law Regulations provides that the following expenses are excluded when applying for the tax credit:
-The proportion of expenditure by producer fees that exceed 6% of the total budget of the production of the film
-The proportion of development costs that exceed 3% of the total budget of the production of the film
-Finance charges and expenses for warranty forms or performance bonds
-Costs related to the marketing and distribution of the work
6. Are there any restrictions on the type films that apply for the film law incentives?
For those audiovisual works benefiting from the tax credit established in article 39 of the Film Law, the legislation provides for a large scope of audiovisual works that may apply for this incentive, including music videos, television series, miniseries and documentaries.
The only restrictions established in the Film Law, in terms of content and type, are those applicable to the incentive on the investment in Dominican Feature Films. Pursuant to article 34 of the Film Law, in order to apply for the aforementioned incentive the film must be a Dominican Feature Film. Other restrictions apply in terms of content; for instance, audiovisual works with educational or training purpose as well as essentially pornographic films are excluded.
7. Are there any restrictions on the type of investment made by investors under incentive on the investment in Dominican Feature Films (article 34 of the Film Law)?
Pursuant to article 133 of the Film Law Regulation, the following investments do not qualify for the incentive provided in article 34 of the Film Law on the incentive on the investment in Dominican Feature Films:
-Those involving the acquisition of debt instruments or securities by investors, as well as any direct investment;
-Those investments made in projects in which the investor is a producer or co-producer of the film;
-Those involving the transfer of all exploitation rights of the film in favor of the investor.