Before considering becoming a DR resident, I would greatly appreciate clarity on the DR Tax system. Below is the tax code on relevant topics along with my italicized questions.
Dominican income tax law is primarily territorial. All income derived from work or business activities in the Dominican Republic is taxable, no matter if the person is a Dominican, a resident foreigner or a nonresident foreigner (Articles 269 and 270).
Question: Defining derived from outside. If a foreigner resident does computer research or consulting work via the internet at his home in the DR, and his customers and activities are clearly from an outside source, would there be tax implications to the DR? As well if receiving revenue from a web business that is not incorporated nor any employees, or legal entities in the DR, except the owner and beneficiary of the income is a foreign DR resident.
Income derived from work done outside of the Dominican Republic, by Dominicans or resident foreigners, is not taxable in the Dominican Republic. The exception to the principle of territoriality is income from financial sources abroad (Articles 269 and 271). A Dominican or a resident foreigner receiving income from financial investments (stocks and bonds, certificates of deposits, etc.) must pay taxes in the Dominican Republic on their income from those investments (Art. 269). Pensions and Social Security benefits are exempt (Art. 2 of Reglamento #139-98).
For the resident foreigner, this obligation only starts three years after obtaining residency (Art. 271).
Question: I cannot find anything in English on Art.269 to clarify beyond the above etc.
If a foreign resident receives income from investment bonds etc. this is only taxable 3 years after obtaining residency?
Gifts are taxed at a 25% rate (Art. 6 of Law #2569)
Question: If a foreign resident receives a gift from a friend or family member, whether it is cash or in-kind, is this subject to a 25% tax?
I am looking for true legal advice here rather than opinions or guessing.
Thanks in advance!
Dominican income tax law is primarily territorial. All income derived from work or business activities in the Dominican Republic is taxable, no matter if the person is a Dominican, a resident foreigner or a nonresident foreigner (Articles 269 and 270).
Question: Defining derived from outside. If a foreigner resident does computer research or consulting work via the internet at his home in the DR, and his customers and activities are clearly from an outside source, would there be tax implications to the DR? As well if receiving revenue from a web business that is not incorporated nor any employees, or legal entities in the DR, except the owner and beneficiary of the income is a foreign DR resident.
Income derived from work done outside of the Dominican Republic, by Dominicans or resident foreigners, is not taxable in the Dominican Republic. The exception to the principle of territoriality is income from financial sources abroad (Articles 269 and 271). A Dominican or a resident foreigner receiving income from financial investments (stocks and bonds, certificates of deposits, etc.) must pay taxes in the Dominican Republic on their income from those investments (Art. 269). Pensions and Social Security benefits are exempt (Art. 2 of Reglamento #139-98).
For the resident foreigner, this obligation only starts three years after obtaining residency (Art. 271).
Question: I cannot find anything in English on Art.269 to clarify beyond the above etc.
If a foreign resident receives income from investment bonds etc. this is only taxable 3 years after obtaining residency?
Gifts are taxed at a 25% rate (Art. 6 of Law #2569)
Question: If a foreign resident receives a gift from a friend or family member, whether it is cash or in-kind, is this subject to a 25% tax?
I am looking for true legal advice here rather than opinions or guessing.
Thanks in advance!