Dominican income tax and your retirement income

[Snuffy]

Sorry Rick...you aren't solving the problems here. Many of these problems are not meant to be solved. They are part of the way of life here and are not considered problems by those who run this government. Why do you think the current government is going ahead with the metro and the island?

Your mission, should you choose to accept this mission, is to find ways to live here in harmony with the environment that surrounds you. Accept the fact that this is not the USA or Europe. The world is upside down here. Learn to walk without gravity. Your job is not to solve the problems. Your job is to learn how to live with them. If it upsets you then don't discuss that which cannot be solved.

Now if I can only learn to follow my own advice.

[Rick Snyder]

Snuffy I will except the mission but I should inform you that I am not Tom Cruise and therefore may not be able to accompolish the mission. Compounded by the fact of not having any fatalistic blood cells circulating in my system there is a distinct possibility that the message will self destruct in 5 seconds.

Merry Christmas to you and everyone out there in cyberspace.

Rick

[CaliforniaGeorge]

According to Hoy (online newspaper in Spanish), the government is taking steps to stop tax evasion of all types of taxes. The head of the DGII, the DR's taxation agency, tax revenues are up across the boards.

http://www.hoy.com.do/app/article.aspx?id=59919

[Snuffy]

Rick...I now knight you Tom Cruise the Second. Be aware that this title will subject you to constant harassment by the local chicas. Merry Christmas to you also...and Happy New Year.

[Fabio J. Guzman]

Dominican income tax law is primarily territorial. All income derived from work or business activities in the Dominican Republic is taxable, no matter if the person is a Dominican, a resident foreigner or a non-resident foreigner.

Income derived from work done abroad, even by a Dominican, is not taxable in the Dominican Republic. For example, the Domininican government does not get a penny from the millions earned by Dominican baseball players in the Major Leagues.

The exception to the principle of territoriality is income from financial sources abroad (Articles 269 and 271 of the Tax Code). A Dominican or a resident foreigner receiving income from financial investments abroad (stocks and bonds, certificates of deposits, etc.) must pay taxes in the DR on their income from those investments. For the resident foreigner, this obligation only starts three years after obtaining residency.

[Rick Snyder]

Thank you Mr Guzman for that very informative and useful information. I love it when an expert or knowledgeable person speaks.

Rick

[bob saunders]

Originally Posted by Fabio J. Guzman

Dominican income tax law is primarily territorial. All income derived from work or business activities in the Dominican Republic is taxable, no matter if the person is a Dominican, a resident foreigner or a non-resident foreigner.

Income derived from work done abroad, even by a Dominican, is not taxable in the Dominican Republic. For example, the Domininican government does not get a penny from the millions earned by Dominican baseball players in the Major Leagues.

The exception to the principle of territoriality is income from financial sources abroad (Articles 269 and 271 of the Tax Code). A Dominican or a resident foreigner receiving income from financial investments abroad (stocks and bonds, certificates of deposits, etc.) must pay taxes in the DR on their income from those investments. For the resident foreigner, this obligation only starts three years after obtaining residency.

BASED ON THE ABOVE, How does it work on pension income(Government Pensions) from another country, such as Canada that has a tax agreement with the DR.

[CaliforniaGeorge]

Originally Posted by CaliforniaGeorge

I started a thread in the government forum and also made an inquiry in a thread started by Pib (she asked tax questions with respect to a Boopie busniness). Anyway, while I did get some interesting information I didn't get the specific answer to my question, which was: Does the DR government tax retirment and/or social security income?

So, I did a google search for Impuesto Sobre La Renta and read the Dominican tax code in Spanish.....AAAAGGGGGHHHHH!

Anyway, it appears to me that after 3 years of a foreigner becoming a resident, your income from foreign sources is taxable by the government of the DR. There does not appear to be an exemption for retirement income from a pension, social security, etc, but there does appear to be a credit for taxes paid on that income in its country of origin. So, if the U.S. taxes you, then you offset Dominican taxes by the American taxes.

The Dominican taxes are graduated and based on your income as are American taxes.

Does anybody know if my analysis is correct? For those of you who pay taxes in the DR, do you pay any tax on income from abroad? Or, do the American taxes essentially completely offset any potential DR tax?

In retrospect, I should have posted this question here in the legal section.

Thank you in advance for your input.

I have been trying to get the answer to that very question for quite a while now. Maybe you will have more luck than me.

[Fabio J. Guzman]

Pensions and Social Security benefits from abroad are in fact exempt from the provisions of Article 269 of the Tax Code. Article 2 of the Regulations for the Aplication of Title II of the Tax Code (Reglamento #139-98) lists what is meant by “inversiones y ganancias financieras”. Pensions and Social Security are not included in the list.

[CaliforniaGeorge]

Thank you Mr. Guzman, that is exactly what I was asking.

This is certainly a great incentive for retirees to relocate to the DR.