New Law on Logistics operators

On July 30, Law No. 30-24 on Logistics Centres, Logistics Centre Operating Companies and Logistics Operating Companies was enacted in order to establish a legal framework for the development and promotion of the Dominican Republic as a Logistics Hub and to regulate the activities carried out by logistics centres, logistics centre operating companies and logistics operating companies developed in the national territory.

Main Definitions

The logistics hub is the area located in the primary zone of customs jurisdiction or its extension, within which the logistics operating companies carry out all their activities related to the transport, logistics and distribution of goods, both for the international and national market. In general, the areas of the logistics centres must be delimited, and the entry and exit accesses must be monitored, authorised and controlled by personnel from the General Customs Directorate (DGA).

For their part, the logistics centre operating companies are the legal entities in charge of planning, constructing, conserving, exploring and promoting the logistics centre. In particular, they are responsible for supplying the infrastructures and equipment of the logistics centres, as well as the services that can be installed and developed in them.

Finally, logistics operating companies are legal entities that operate and supply third parties with storage services, inventory management, classification, consolidation, deconsolidation and distribution of cargo, packing, repacking, re-packing, labelling, re-labelling, packaging, repacking and splitting of products, refrigeration, re-export, separation, transportation, and any other logistics activity that facilitates the competitiveness of companies. Logistics operating companies may not carry out processes of transformation or elaboration of goods similar to those permitted in export processing zones; their activities must be limited to minimal processes.

New National Logistics Council

The Law provides for the creation of the National Logistics Council, as a body under the Ministry of Industry, Commerce and MSMEs (MICM), which will be responsible for defining and approving policies, strategies and plans for the development of logistics centres, companies operating logistics centres, and logistics operating companies.

Qualification

The authorisation of logistics centres, logistics centre operating companies and logistics operating companies must be submitted through a request for installation to the National Logistics Council, which must issue a report approving or rejecting the request within a period not exceeding 90 calendar days. Favourable reports will be subject to authorisation by means of a resolution, which will contain the technical and economic characteristics on which the approval was based.
These licences will be granted for an indefinite period of time, and may be suspended or revoked at any time by the National Logistics Council for non-compliance with the obligations established in the law and its regulations, after exhausting the administrative sanctioning procedure.

Companies that have within their infrastructure platforms for the import, export, dispatch or shipment by electricity networks, ducts, pipelines or authorised places for the entry and exit of fuels from maritime and air cargo transport, must comply with a series of special requirements for their authorisation, which are established in Article 22 of the Law.

Entry of Goods/Controls

Logistics operating companies may handle all types of goods, except those whose import, export or commercialisation is prohibited by law.

The goods entered into logistic operating companies may remain within them for a period of 12 months from the date of receipt, with the possibility of requesting an additional special period of up to 6 months from the DGA. Once this period has expired, the goods will be abandoned. The transfer of goods from one logistics company to another does not interrupt or renew the period of permanence. This provision is also applicable to goods received in logistics centres.
In that order of ideas, in the case of logistics operators, the goods introduced are considered to have entered an international cargo terminal, so that, for a period of up to 12 months from the date of receipt, they are not required to pay duties and taxes. During this period, these goods may be destined for re-export, consumption, or any other customs procedure for which the importer is authorised or for the operations foreseen for this company.

Those goods of foreign origin stored in the logistics operating companies are not subject to the payment of duties and taxes applicable to foreign trade, until such time as they are presented under the customs procedure to which they are subject. These entered goods will not require the corresponding entry permits, except in cases where the authorities determine that this is necessary for phytosanitary, zoosanitary, public health or national security reasons.

On the other hand, goods that have been subjected to minimal or insufficient processes or operations by companies operating logistics centres and logistics operating companies, in order to enter the local market, must be nationalised by a resident taxpayer with a National Taxpayer Register (RNC). Such merchandise upon entering the local market will be subject to a 3.5% tax on the gross sales value, except for those that are subject exclusively to the following logistics services: storage, inventory management, classification, packaging, repackaging, labelling, re-labelling, packaging and product fractionation, refrigeration, re-export, separation and transportation.

Foreign goods in the custody of logistics centre operators and logistics operating companies shall benefit from the tariff preferences, provided that the DGA verifies that their nature has not been altered and that they have not undergone substantial transformation. In such cases, upon entry into the local market, they shall be charged the Most Favoured Nation Tariff on non-originating inputs used in logistics operations, without prejudice to the payment of any other duties, taxes or levies that may apply. Otherwise, if the goods are subjected to processes that change their nature or cause their substantial transformation, they will lose their status as originating goods, and the Most Favoured Nation Tariff and the rate of 3.5% will be applied.
The companies operating logistics centres and logistics operating companies are jointly and severally liable before the Directorate General of Internal Taxes (DGII) and the DGA, with regard to the goods in their custody. Their responsibility for the goods received ends once: (i) the goods are re-shipped, exported or re-exported; (ii) the goods are destined for the consumption regime or another special customs regime in force; (iii) the goods are expressly or de facto abandoned, or lost due to proven force majeure; and (iv) the goods are disposed of or destroyed, under the process established by the DGA.

When logistics operating companies and export processing zones that exchange services or supply goods to each other coexist in the same logistics centre, they shall comply with all the required formalities and controls, as if such operations were carried out outside the same logistics park or centre.

Fiscal Regime

Regarding tax benefits, Article 67 of the Law provides that logistics centres may be set up under the ordinary tax regime; under the tax incentives established in Law No. 8-90 on the Promotion of Free Zones; or under the incentives of Law No. 12-21 that creates the Special Zone for Integral Border Development, which covers the provinces of Pedernales, Independencia, Elías Piña, Dajabón, Montecristi, Santiago Rodríguez and Bahoruco.

Logistics operating companies wishing to avail themselves of the incentives established in Law No. 8-90 or in the Border Development Law, must obtain the approval of the National Council of Free Export Zones or the Coordination Council for the Special Border Development Zone, as appropriate.
In this regard, the logistics centres that are covered by the taxation regime of Law No. 8-90 will be taxed in accordance with the provisions of Article 11 of Law No. 139-11, as amended by Law No. 253-12, which levies a tax of 3.5% of its value on gross sales made in the local market.

Since logistics operating companies are not considered manufacturers, the 3.5% tax will be applied only on the value of the services rendered, regardless of the applicable Most Favoured Nation or preferential tariffs and other taxes associated with the importation of the goods.

For their part, companies operating logistics centres and logistics operating companies established under the ordinary taxation regime shall be subject exclusively to the provisions of the Dominican Tax Code.
The use of services provided by logistics operating companies or logistics centres does not exempt export processing zone companies from the payment of the 3.5% income tax, calculated on the value of their gross sales made in the local market.
As a last fiscal aspect to be highlighted, it is prohibited that under the same company name or RNC, logistics operating companies and companies installed under the export processing zone regime operate, regardless of whether they are in the same logistics centre or free zone park, or provide mutual services or supply goods and materials.

Implementing Regulations/Derogations

The implementing regulations of Law No. 30-24 must be issued within 120 days from the entry into force of the law. The Law came into force throughout the national territory on 1 August 2024.