Global Property Guide

Financial Information for Residential Property Buyers


Living There

Last Updated: July 24, 2018

INDIVIDUAL TAXATION

Dominican Republic beachfront houses

Residents are taxed on their worldwide income and some kinds of investment income derived from abroad. Foreign individuals who are residents won´t be taxed on their investment income derived from abroad until the third year (taxable period) in which they´ve become residents.

Married individuals are assessed and taxed separately from their partners.

INCOME TAX

Taxable income includes: (1) employment income, (2) business income, (3) professional income, (4) investment income, (5) income from immovable property, capital gains, pensions, and (6) betting and gambling profits.

Income and capital gains are taxed at progressive rates. The scale isadjusted for inflation every January.

INCOME TAX 2017

TAXABLE INCOME, DOP (US$) TAX RATE
Up to 416,220 (US$8,856) 0%
416,220 – 624,319 (US$13,283) 15% on band over US$8,856
624,319 – 867,123 (US$18,449) 20% on band over US$13,283
Over 867,123 (US$18,449) 25% on all income over US$18,449
Source: Global Property Guide

INCOME TAX 2016

TAXABLE INCOME, DOP (US$) TAX RATE
Up to 409,281 (US$8,708) 0%
409,281 - 613,921 (US$13,062) 15% on band over US$8,708
613,921 - 852,667 (US$18,142) 20% on band over US$13,062
Over 852,667 (US$18,142) 25% on all income over US$18,142
Source: Global Property Guide

INCOME TAX 2015

TAXABLE INCOME, DOP (US$) TAX RATE
Up to 399,923 (US$8,509) 0%
399,923 - 599,884 (US$12,764) 15% on band over US$8,509
599,884 - 833,171 (US$17,727) 20% on band over US$12,764
Over 833,171 (US$17,727) 25% on all income over US$17,727
Source: Global Property Guide

In addition to the progressive taxes mentioned above, a 1% flat rate is levied on the taxable income and a 3% surcharge applied to the income tax payable.

RENTAL INCOME
Rental income is taxed at progressive rates. Income-generating expenses are deductible when computing for taxable income.

For residents who earn 80% of their income from entrepreneurial, professional or similar activities where income does not exceed US$100,000 annually may opt for a flat-rate deduction of 30% of the gross income instead of itemizing specific costs and expenses in order to determine the net taxable income.

Rental income is subject to 10% withholding tax, which is considered as advance payment and will be credited against the taxpayer´s income tax liability.

CAPITAL GAINS TAX
Capital gains arising from the sale or transfer of property are subject to capital gains tax at a flat rate of 27%. The taxable gain is computed by deducting the acquisition cost as adjusted for inflation from the gross selling price or the market value.

Net Wealth Tax (impuesto al activo)

The net wealth tax is levied at a flat rate of 1% on the property´s market value, without adjusting for inflation. The net wealth tax can be credited against income tax liability.

The net wealth tax is payable twice annually, every June and December.


PROPERTY TAX


Property Tax

Property tax is based on the cadastral value of the property as determined by the government, usually at much less than the market value. It is levied annually at a rate of 1% on the property´s cadastral value exceeding DOP6,800,000 (US$144,681). Properties with values below the threshold amount are not taxed.

CORPORATE TAXATION

INCOME TAX

Income and capital gains earned by companies are subject to corporate income tax at a flat rate of 27%. Income-generating expenses are deductible when calculating taxable income.

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