Estate Tax?? Applicable to the DR??

[gringosabroso]

Almost every American state & the US Federal Government impose an 'estate tax'. The estate tax is the tax imposed on the assets existing at the death of a person, payable to the Gov't before her heirs can take valid legal title to the assets.

* It varies greatly from state to state. The present Federal minmum is US $2,000,000. ie unless the deceased leaves a gross estate of more than US $2,000,000., there is no Federal estate tax payable. It gets more complex.

* My question: is there an estate tax in the DR? In outline form, what are its terms. Thank you.

[Fabio J. Guzman]

Inheritance tax = 3% on assets. For non-residents, it would be 4.5% because of the law provides for a 50% surcharge on non-residents.

[GringoCArlos]

and Fabio, wouldn't it also be fair to say that in practice, it is 3% on assets held in the DR (if they bother to collect at all), rather than 3% on all assets held worldwide???

Or has the Dominican government suddenly gotten so efficient that not only are they actually collecting the 3% on assets here, that they are also working with other governments to identify and tax Dominican assets held in other countries?

[gringosabroso]

I'm an American who has been living in the DR for 11 years.

* I have an existing will in English listing Mass. as my USA state of residence.

* I was recently told by a knowledeable Canadian DR resident [1 of 1,000s] that in addition I need a will in Spanish, with the usual witnesses & a notary public to dispose of my Dominican assets.

* In effect, my American - English language will is not & will not be valid in the DR to dispose of my assets located in the DR.

* Comments? Similar experiences? Recommendations? Thank you.

[Fabio J. Guzman]

GringoCarlos:

For a resident of the Dominican Republic, the inheritance tax will affect all assets in the Dominican Republic and ALL MOVEABLE assets outside the Dominican Republic (Article 1 of Law #2569 of 1950), meaning that the only assets not included are real estate properties outside the Dominican Republic.

In practice, the tax authorities have never bothered collecting the tax on assets abroad.


gringosabroso:

Your will in the U.S. will be recognized as valid in the Dominican Republic, provided it was done correctly in the US. However, you or your heirs will need to have it stamped at the nearest Dominican Consulate and have it translated into Spanish.