Ruling SCJ-TS-25-0318 and the criterion that airports cannot qualify for tourism incentives.
Through this ruling, the Third Chamber of the Supreme Court of Justice (SCJ) sets a fundamental precedent regarding the application of Law No. 158-01, the Law for the Promotion of Tourism Development in low-development areas and new poles in provinces and localities with great potential. The decision is based on Article 3 of said law, which states that companies engaged in tourism activities in designated tourist poles may qualify for exemptions from income tax, municipal and national incorporation taxes, import duties, among others, which have a decisive impact on the operations and profitability of these companies.
This is significant because the ruling establishes that not all activities linked to tourism automatically qualify for the tax benefits of the law, which by nature is restrictive and must align with what the State promotes and considers cost-effective for the country.
Upon reviewing Article 3, it is clear that airport infrastructure, air transportation, and airport services are excluded from the incentives, as the purpose of the legislation is to promote activities that generate investment, employment, and foreign currency inflows into the Dominican Republic. This is further confirmed by Law No. 195-13, which amends Law 158-01 and also does not include such companies as eligible for the exemptions. In this regard, the ruling states that: “The definitive classification authorization was issued illegally by exceeding the sectors that may be covered by the tourism incentive regime, which does not include airport infrastructure, air transport, or airport services.”
It is also important to highlight that the ruling emphasizes the requirement to meet all conditions for classification as a tourism project in order to receive such benefits, notably including the valid environmental authorization issued by the Ministry of Environment and Natural Resources. The ruling clearly states that “no incentive shall be granted if the investor does not hold the proper environmental license issued by the Ministry of Environment and Natural Resources.”
Furthermore, it was noted that there was no evidence that the project had been properly disclosed to all stakeholders through any form of mass communication, despite its far-reaching implications. This is tied to the regulation of the same law, which mandates at least one public consultation in the area of influence of the project.
This ruling marks an important precedent for the tourism sector, as it reinforces the provisions of the law and clarifies which companies within the sector are eligible for the incentives.
By:
Lyath Jimenez