INDIVIDUAL TAXATION

- INCOME TAX

Nonresident foreign individuals earnings rental income are taxed at a flat rate of 29%, witheld by the tenant. No deductions are allowed for rental income.

- RENTAL INCOME TAX

Subject to 20%% withholding tax.

- NET WEALTH TAX (impuesto al activo)

The net wealth tax was introduced in 2006. This 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 annualy, every June and December.

- CAPITAL GAINS TAX

Capital gains arising from the sale or transfer of property are taxed as income. The taxable gain is computed by deducting the acquisition cost as adjusted for inflation from the gross selling price or the market value. Capital gains earned by nonresident individuals are taxed at a flat rate of 29% for 2007.

The corporate taxe rate, which is the applicable income tax rate for nonresident individuals, will be gradually decreased over the next couple of years. The tax rate would be 27% for 2008 and 25% for 2009.

PROPERTY TAXE

Property tax is based on the value of the property as determined by the government, usually at much less than the market value. It is levied annualy at a rate of 1% of the government-determined property value, exceeding RD$ 5 million (US$ 148.830). Below the threshold amount, the property is not taxed.

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