This matter has caused a lot of confusion because of expectations on the part of the legal community and because of the way the amendment was drafted. Let?s go step by step.
Law 831 of 1945 established a proportional tax on transfers done by the Registrars of Title. This tax was originally 3 per 1000 and is currently 10 per 1000 or 1%.
Article 7 of Law 831 made four exceptions to the application of this tax, including, under Section (d) of Article 7, contributions in kind (?aportes?) to companies.
The new Tax Reform Bill (Law #288-04) amended the old text of Section (d) of Article 7 to say:
?d) the contributions in kind to the capital of national companies....?
Meaning that contributions in kind (aportes en naturaleza) to Dominican companies are still exempt. Contributions in kind to foreign companies, however, will now pay the proportional tax.
Many lawyers, including me, assumed upon first reading of the Tax Reform Bill, that if Section (d) was amended it could only be to suppress the exemption (which had been expected to occur) without taking into consideration that what had been done was simply to make a distinction between Dominican and foreign companies.