SANTO DOMINGO– Some taxpayers who had to pay their taxes this year were surprised by a new one added to their tax list. This is Law 225-20, the General Law for the Comprehensive Management and Co-processing of Solid Waste, enacted on October 2, 2020, and which came into effect six months later.
Law 225-20 aims to prevent the generation of waste, as well as establish the legal framework for its comprehensive management to promote reduction, reuse, recycling, utilization and valorization, in addition to regulating collection, transportation and sweeping systems.
Leonardo Díaz, an accountant from the firm Díaz M. Consulting, answers eight questions that illustrate the topic.
1-¿What is the law that mandates the collection of the tax on solid waste about?
This is Law 225-20, the General Law on Comprehensive Management and Co-processing of Solid Waste, enacted on October 2, 2020.
2- Who does it apply to, companies and individuals?
The contribution imposed by this Law applies to all legal entities, both public and private, and non-profit institutions. Natural persons are exempt from payment.
3-¿What is the purpose of this?
This law aims to prevent waste generation and establishes the legal framework for its comprehensive management to promote reduction, reuse, recycling, recovery, and valorization. It also regulates the systems for collecting, transporting, and street sweeping such waste.
4- ¿When did it come into effect?
The law came into effect six months after it was enacted, and the first payments began to be made when the Annual Corporate Tax Returns with a fiscal year-end date of March 30, 2021 were submitted, which had a deadline for submission and payment of 120 days after the fiscal year-end, that is, until July 29, 2021.
5-How often are payments made?
Payment is made as follows:
For companies that file under the normal declaration regime (IR-2) and Non-Profit Institutions (ISFL), the payment will be made on the deadline for filing their annual declaration, that is, no later than 120 days after their fiscal closing date of each year.
Legal entities subject to the Simplified Tax Regime for Purchases and Income no later than the last working day of March.
Taxpayers in the agricultural sector, no later than the deadline for filing their tax return
6- What is the annual amount to be paid and how is it calculated?
Payments must be made in a single payment and according to the following scale:
| Annual Income Range: | Contribution: |
| From RD$0 to RD$1,000,000.00 | RD$500.00 |
| From RD$1,000,000.01 to RD$8,000,000.00 | RD$1,500.00 |
| From RD$8,000,000.01 to RD$20,000,000.00 | RD$5,000.00 |
| From RD$20,000,000.01 to RD$50,000,000 | RD$30,000.00 |
| From RD$50,000,000.01 to RD$100,000,000.00 | RD$90,000.00 |
| Greater than RD$100,000,000.01 | RD$260,000.00 |
7- Incentives and other important information:
According to Articles 44, 45, and 46 of this law, incentives are available for five years from the date of its enactment for investments in activities related to its purpose. These incentives include exemptions from Income Tax, Asset Tax, Tariffs, and ITIBS (Tax on the Transfer of Goods and Services).
The amount of the annual contribution may be deducted from the gross income of legal entities, as established in subparagraph i) of Article 287 of the Tax Code of the Dominican Republic.
8- Governing entity
The Ministry of Environment and Natural Resources is the implementing authority in matters of waste, with the power to regulate, direct and control the application of law 225-20.
