Free trade agreements allow tariff-free import of vehicles

Vehicles originating from 52 states of the USA, as well as from 27 countries of the European Community, enter without payment of tariffs from the end of 2023 for customs purposes, as contemplated by the DR-Cafta free trade agreement signed with the five. In the Trade and Development Agreement with the Central American countries and the Dominican Republic and the United States and Europe (EPA).

Tariff liberalization also covers automobile spare parts. DR-Cafta provides rules of origin and a “net price method” (by regional content), which ensures that 35% to 40% of inputs for the production of imported vehicles come from member countries, in this case the United States, with prior certification by the manufacturer.

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According to the DR-Cafta agreement, tariff items from 87.02101 establish the type of cylinder capacity of vehicles entering without paying the tariff rate for cars of 2.5000 cm3; While subsequent vehicles also cover vehicles with cylinder capacity above that size as well as vehicles with 2,800 cm3. These types of vehicles are known as “wagons” in the country due to their small size. In this type of displacement, electric vehicles are excluded, as specific legislation applies to these.

Vehicles using hydrogen also enter duty free. Closed vans, tank trucks, refrigerated trucks, isothermal trucks and waste collection trucks were exempted from paying the tariff rate. Likewise, bicycles, bicycles, yachts, “jet ski” boats (water boats), trailers, food carts and others.

DR-Cafta established a 15-year term for tariff reduction or elimination, which expired in December 2024, allowing vehicle imports to be exempt from those tariffs from January 2024.

In the agreement, the percentage of tariff reduction (annual reduction) in this year 2024 is 11.88%. There will be no tariff in the next year 2025, as it reaches zero, after passing the reduction period applied with the letters of the alphabet. (A, B, C, M, F, D, N, O, V, W and X).

In view of the reciprocity and competition established in the WTO (World Trade Organization), the agreements of both the markets (USA and Europe) are similar in terms of imports. Cars over 5 years old are subject to restrictions and pay tax, as are cars over 5 tonnes and over 15 years of production.

There are several reasons for tariff-free car prices and possible price reductions from member countries of the trade agreement: The first reason is that since the tax reform law has been implemented in the country, a rate of 17% is levied at the entrance (first plate) and other charges.

In DR, the vehicle fleet closed at 5 million 865,024 units in February this year, a significant increase compared to the end of 2023, which stood at 5 million 810,888 units. According to DGII data, motorcycles accounted for over 3.3 million of the total vehicles in circulation in January-February 2024.

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chrono

2004

The Dominican Republic signed the DR-Cafta free trade agreement with Central America and the United States in August 2004.

2007

For customs purposes, the DR-Cafta Agreement entered into force in 2006, as it will enter into force in 2007 when it is ratified in the DR, El Salvador enters into force in 2006 and is established when one of the parties does so. get started.

2008

The EPA agreement with Europe applies to members of the Union, which numbered 27 at the time.