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Types of Taxes in the Dominican Republic

Types of Taxes in the Dominican Republic

Daydreaming of daiquiris on the beach and saying goodbye to long nasty winters forever? Casa Linda Quality Communities is here to help make your vision of life in tropical paradise a reality! Located on the northern end of the Dominican Republic just outside Cabarete and Sousa, our luxury villa community is the perfect place for ex-pats from all walks of life to settle in and enjoy the many perks of island living. From long sunny days with soaring temperatures (the DR averages over 300 days of sun each year and daily temps around 24°C or 82°F) to a vibrant community of welcoming friends, there’s no better place to call home and start a new life full of adventure and relaxation!

Relocating Basics: A Quick Look at DR Taxes

Moving abroad is an incredibly exciting process, and with a little homework and extra knowledge on your side, you can make the transition easier! At Casa Linda, we often get questions about the quality of life in the DR, as well as what to expect when it comes to taxes when you settle down in the Dominican. Below, we’ve put together a quick list of 5 basic taxes you can expect to encounter within the Dominican Republic.

Income Tax

Thanks to the country’s openness to foreign investors, and entrepreneurs and the recent surge in WFH friendly workplaces, the Dominican has become an increasingly popular destination for ex-pats looking to earn income while they enjoy the perks of paradise. It is important to note that those residing in the DR for more than 182 days a year will be considered taxable residents and you will need to get a tax number to file accordingly.

Those who earn $8,671 USD or more annually ($722 USD monthly) will need to prepare to file taxes, but the good news is, that your income is only taxed based on what you make in the DR exclusively. Once you’ve been a resident for over 3 years, you’ll also have to pay taxes on overseas investments, but pensions or social security funds are not considered within this category.

dominican republic taxes

Capital Gains Tax

Capital gains refer to money made during the sale of an asset, and the tax placed upon the profit to adjust for inflation. Capital gains are taxed like regular income (0 % – 25 % for individual taxpayers and 27 % for companies). Worth noting is that there is an adjustment in place to account for the depreciation in value of an asset (i.e. vehicles) over time, so your inflation value is related to the overall salvage value and the overall value is assessed in Dominican Pesos opposed to USD.

Property Tax

Property taxes are assessed at 1% of the total value of your home for dwellings exceeding $135K USD. Those who own bare land and intend to build you will still be subject to the 1% assessment without the minimum threshold. Property tax is dues by March 11 each year and can be paid in either one or two instalments.

Inheritance Tax

All estates of those residing within the Dominican are subject to inheritance tax, regardless of the nationality of the owner. Inheritance taxes in the DR are 3% of the overall value after deductions including medical and funeral expenses, as well as outstanding debts and mortgages. Beneficiaries should be aware that they must file a declaration within 90 days, though in complex cases you can gain an additional 3-month extension where warranted.

Double Taxation

Most expatriates are (rightfully) concerned with knowing whether or not they will be subject to double taxation when they move to the DR. In simple terms: unless you are a Canadian or Spanish citizen, the answer is yes. At present the DR only has ratified treaties with Canada and Spain, therefore other nations are still subject to double taxes (sorry!).

Learn More about Life in the DR Today!

At Casa Linda, there’s nothing we love more than welcoming you to our sunny shores. With beautiful custom villas available at affordable prices, your life in paradise is closer than you think! Contact us today to learn more!

What You Need to Know About Taxes in the DR

What You Need to Know About Taxes in the DR

Are you planning on taking the leap and retiring abroad in the next few years? Leaving behind the old and welcoming a new life of adventure as an expatriate can be a wonderful way to shake up your day-to-day and celebrate a new chapter full of excitement. As one of the safest and most popular locales for retirees from all over the world, the Dominican Republic is a fantastic place to settle down and start the life you’ve always wanted.

As one of the top builders in the Dominican, Casa Linda Quality Communities is proud to welcome expatriates to our sunny shores and help you create your dream custom home in paradise. Located on the northern end of the island, our beautiful development sites give you the chance to experience affordable luxury and build a new life in a friendly, vibrant community full of people just like you!

Below, we’ll talk about one of the most important aspects to keep in mind when planning to move abroad: handling your taxes. Read on to learn more!

Why Consider Life in the DR?

If you’ve been looking into tropical destinations to retire in, you’ve likely seen the Dominican Republic at the top of most lists. Our popularity is well-deserved, with white sandy beaches, a friendly culture, gorgeous natural backdrop and economic and political stability being among some of the main reasons people decide to retire here. As the most advanced and one of the most developed Latin American countries, the Dominican Republic offers high quality of life and affordable living alongside a top-tier healthcare system, great infrastructure and multiple airports all over the country that make it easy to get back to your love ones whenever you need. In fact, one of the most common comments we hear from our residents is that island living is just like home, only warmer!

taxes in the dominican republic

Taxes in the DR

Whenever you move abroad it’s crucial to remember that you’ll still be expected to uphold certain standards that were a part of your daily life back home, including paying taxes. In the DR, those remaining in the country for more than 183 days a year are subject to taxation on a scaled level starting from incomes of approximately $10,000 USD. If you choose to relocate to the Dominican Republic permanently, you can expect that you will be taxed as a foreign resident up until the point you obtain citizenship, at which point you will be taxed as a naturalized citizen. For those choosing to relocate to the Dominican before they retire, and who choose to move their business with them, you’ll be pleased to know that there are plenty of opportunities to claim ample expenses to help offset the initial pinch of paying taxes in a new country.

Main Taxes

In general, there are three main taxes you’ll want to be aware of in the DR:

Corporations operating in the DR will be subject to a 27% corporation tax on net taxable income.

Capital Gains

Capital gains are one of the larger taxes in the DR, coming in at 27% of your earnings. If you choose to invest in real estate on the island (which is easy to due thanks to the government’s open attitude to foreign buyers), you’ll want to keep this in mind. For Americans, this amount can also be used to even out the amount you are required to pay on the US side each year, and, as we mentioned above, the write-offs that are available can help to cushion the cost as well.

Inheritance Tax

The DR’s inheritance tax amounts to 3% of the inherited estate, from which you can deduct outstanding debts as well as medical and funeral expenses.

Overall, many newcomers to the Dominican find that taxation is an easy system to navigate, both as a foreign resident, as well as once you obtain citizenship. One of the most attractive aspects of moving to this beautiful country is that the government truly welcomes newcomers with open arms and maintains ownership and financial policies that allow you to live the life you’ve always wanted with peace and security, as well as minimal red tape where financials and restrictions are concerned.

Discover Dominican Living Today

Want to learn more about relocating to the Dominican Republic? Contact Casa Linda today to learn about our breathtaking affordable villas, as well as our ever-growing community in Cabarete.