INDIVIDUAL TAXATION

- INCOME TAX

Non-resident individuals earning rental income are taxed at a flat rate of 29%, withheld by the tenant. No deductions are allowed for rental income.

- RENTAL INCOME TAX

Subject to a 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% of the property's market value, without adjustment for inflation. The net wealth tax can be credited against income tax liability.

The net wealth tax is payable twice a year, in June and December.

- CAPITAL GAIN TAX

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

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

PROPERTY TAX

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 annually at a rate of 1% of portion of the the government-determined property value, exceeding RD$ 5 million (US$ 148.830). When below the threshold amount, the property is not taxed.

Return to the top of the page