Income tax

[Fabio J. Guzman]

Lambada is correct.

Income from financial sources abroad is taxable (Articles 269 and 271 of the Tax Code; Art. 2 of Regulation #139-98). 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. Pensions and Social Security benefits are exempt.

Art. 299-s of the Tax Code exempts from income taxes all interest income received by individuals from Dominican financial institutions.

[mountainannie]

Originally Posted by Fabio J. Guzman

Lambada is correct.

Income from financial sources abroad is taxable (Articles 269 and 271 of the Tax Code; Art. 2 of Regulation #139-98). 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. Pensions and Social Security benefits are exempt.

Art. 299-s of the Tax Code exempts from income taxes all interest income received by individuals from Dominican financial institutions.

You mean that should I get my residency, I would be liable to double taxation here? In that I pay income tax on my investments in the US and would also be liable for taxes here? This would be a major DISINCENTIVE to my obtaining residency, as far as I can see. Is there no exemption for those who retire here? What is the tax rate? Of course, I can't imagine how they could enforce this but I try to be law abiding and would rather take a trip out of the country every year than be liable for additional taxes...... More info, please..

[CFA123]

Mountainannie
Check u.s. tax code, but I think you get credit for taxes paid in other countries. Use 'credit taxes foreign' in yahoo and look at IRS site. Taxes appear limited to higher of u.s. or foreign tax. In other words if you pay 15% in DR but fall in 20% bracket in u.s. You would pay 5% to IRS. If you pay 20% in DR but fall in15% bracket in U.S. You would owe nothing to the IRS.

[mountainannie]

Yes, you are right there is that deduction. What is the tax rate here in the DR? Where do I find it?

[Fabio J. Guzman]

As of January 2009, the tax schedule for individuals is the following:

Up to RD$330,301 annually - exempt
RD$330,301.01-RD$ 495,450.00 - 15%
RD$495,450.01-RD$688,125.00 - 20%
Above RD$688,125.00.01 - 25%

Figures are in Dominican Pesos (RD$).The scale is adjusted for inflation every January.

[Lambada]

Originally Posted by mountainannie

Of course, I can't imagine how they could enforce this but I try to be law abiding and would rather take a trip out of the country every year than be liable for additional taxes

They don't enforce as such...yet. They rely on what information we provide in our submission of our tax returns. Not sure that 'taking a trip out of country' helps much - you could check with Dr. Guzman but I think 182 days per year of living in the DR constitutes residence.

[Fabio J. Guzman]

Art. 12, Párrafo, del Código Tributario: "Son residentes en el país, para los efectos tributarios, las personas que permanezcan en él más de 182 días, en forma continua o discontinua, en el ejercicio fiscal."

Staying in the DR for more than 182 days in any given year, makes you a Dominican resident for tax purposes.