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 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.
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 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.
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.