Taxation on pensions

El Jefe

Bronze
Jan 1, 2002
534
0
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I am considering retirement in the DR. Still about 5 years off or more. Question is: I will have the following income sources

My civil service pension
US Social Security
A small 401K annuity

How would the DR treat these taxwise?

At present I plan to have a bank account in my home town to recieve these payments and then tranfer to the DR as needed.
 

Kuda

*** Sock-puppet ***
Jan 1, 2002
62
0
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Jefe...sssshhhhh....Don't give them any ideas!

Let me preface this by saying that I am not a lawyer. Anything I say cannot be used against me in a court of law. You have a right to speak with an attorney.

My research on this subject brought me to DR1. You're gonna be taxed on that dinero in the US. DR just wants you to pop it in the bank and spend it there. So, set the funds on auto-deposit and draw them out at an ATM. If you set up an account at a bank, you can do transfers. Bring it, spend it, everything's cool.

It's when you are looking to take ownership of something or want to make investment returns that they start paying attention, and rightly so. Then you hook up with DR lawyer to help pave the way. Make a gain there, pay tax there, it's only fair.

The magic is figuring out a way to stop Uncle Sam from skimming his "take" while you are contributing to another society. I look forward to a world view policy of "if you are not taking advantages of this country's services, thou shalt not be taxed". But in the meantime, you have to get creative. U.S. incorporation, trusts, you know, the IRS rules game. Spend a little, save a lot??? Same thing on the DR side, 'cept that they speak espanol and have a completely different, but similar set of rules. You don't know the till the end. You know, the lawyer answer: "It depends."

BTW, whereabouts in CS do you live. I have a good friend in the Black Forest. And I'm a Civil Servant (Servitude...woohooo?!?) as well. Just wish it was 5 years for me. Buena Suerte.
 

Criss Colon

Platinum
Jan 2, 2002
21,843
191
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yahoomail.com
Jefe,Ihave been living here for more than 6 years.I have my Veterans Pension deposited "Electronically" in mY checking acct. in the US.i CAN,AND DO,USe THE LOCAL CASH MACHINES TO WITHDRAW FROM THAT ACCT.tHE EXCHANGE RATE IS NOT GREAT,BUT i ONLY USE THAT OPCION AS A LAST RESORT. i CAN CASH MY PERSONAL CHECK,FROM MY us BANK HERE IN sANTO dOMINGO.i USE A "cASA DE cAMBIO"(sorry about those caps.,I was not paying attention!)where I have developed a "relationship"I make the check out in US$s,and I get US dollars cash,at 1 to 1,or pesos at the current rate.This works for me.PS I came when I was 50,don,t wait as long as you think you "Need" to!The sooner the better! You can make it work. Criss
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
2,359
252
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www.drlawyer.com
Foreigners residing legally in the Dominican Republic, must pay taxes on their worldwide income from financial investments after their third year of residency in the country (Articles 269 and 271 of the Tax Code). The same applies to Dominicans but without the 3-year grace period. The key text here is "de inversiones y ganancias financieras" ("of financial investments and earnings"). Would pension and social security benefits from abroad be included under that definition? I'm not sure what the answer would be. I do know however that Internal Revenue has not enforced this provision, not even against Dominicans with assets abroad.