- Thread starter fiocco
- Start date
Are incomes from abroad taxable?
Are you of retirement age? Will you be living in the DR full time? Are you going to maintain a European address? I am not an accountant but I would say that the income that you currently declare would not be taxable in the DR. If you live in the DR you would still have to file a tax return in your home country. I am not sure how the DR would have any access to those income sources.
You are going to be taxed on the income, one place or another, and it's usually the country of origin for the income, including retirements and social benefits. Living here doesn't relieve you from filing your taxes in your country of origin.
As I recall, Sr Guzman reported here that a law exists to tax offshore incomes but it is not being enforced.
In some cases, there is no need to file returns Ina home country unless income is earned there.
In some cases, there is no need to file returns Ina home country unless income is earned there.
A very difficult topic, because:
1. it's tax related (generally complicated)
2. what income you have to pay in which country depends on a number of factors:
- the tax laws in your "home" country
- the tax laws in the country you're moving to
- whether you still have residency in you home country (actually a very tricky question)
- whether there is a tax treaty between the two countries, and if so what it says.
Currently the DR has tax treaties with only a very small number of other countries (Canada is one of them, but none in EU asaik).
However, I found the following document:
http://www.pkf.com/media/1954350/dominican republic pkf tax guide 2013.pdf
It says that "Resident and non-resident individuals are subject to income tax on Dominican sourced income only". So if this is true you're in luck.
However, if you still have a residency in your home country, than you will likely (at least in theory) be taxable for you dominican income in addition to your income at home (in Germany we call this concept "Welteinkommen"). If you don't have residency though you might be able to have your income in your home country tax-free, again this depends on the specific tax legislation of each country (e.g. in Germay there is a law to specifically prevent that, so you would be taxable with your German income in Germany even though you now live in DR full time).
1. it's tax related (generally complicated)
2. what income you have to pay in which country depends on a number of factors:
- the tax laws in your "home" country
- the tax laws in the country you're moving to
- whether you still have residency in you home country (actually a very tricky question)
- whether there is a tax treaty between the two countries, and if so what it says.
Currently the DR has tax treaties with only a very small number of other countries (Canada is one of them, but none in EU asaik).
However, I found the following document:
http://www.pkf.com/media/1954350/dominican republic pkf tax guide 2013.pdf
It says that "Resident and non-resident individuals are subject to income tax on Dominican sourced income only". So if this is true you're in luck.
However, if you still have a residency in your home country, than you will likely (at least in theory) be taxable for you dominican income in addition to your income at home (in Germany we call this concept "Welteinkommen"). If you don't have residency though you might be able to have your income in your home country tax-free, again this depends on the specific tax legislation of each country (e.g. in Germay there is a law to specifically prevent that, so you would be taxable with your German income in Germany even though you now live in DR full time).
And while I'm at it I want to clarify something that many people get wrong, and that is the (in-)famous "183-day" rule. Most people believe that if you stay less than 183 days in a country during a calendar year, that you are not taxable there. But this is not true, it is actually the other way around: if you stay at least 183 days in one country you definitly have tax residency there, no matter what other circumstances apply. As an example: this was the case with Boris Becker, who almost went to jail for tax evasion, although he was less than 183 days in Germany in each of these years. He had his (main) residency in Monaco, but for some periods of time he lived in an apartment in Munich, that his sister(!) rented (the lease was on her name), but German tax authorities found out and could prove that she rented it only for her brother to live in, so it was considered his residency in Germany and therefore he was taxable in Germany. Because at the time there was no tax treaty between Germany and Monaco he had to pay taxes for his total(!) worldwide income.
Again, it depends all on the specific tax regulations and bilateral tax treaties (their main object is to avoid double taxation). Another example: you are a UK citizen and move to Germany for a project for 7 month, while keeping your flat in the UK. You are now taxable in both countries, and with your total worldwide income. To avoid this possible double taxation, the UK and Germany made a tax treaty and according to it's rules you will only be taxed in one country.
The US is an exception here, because they don't tax only by residency but by citizenship. Other countries (at least in the EU) treat this "taxable" question similar.
Again, it depends all on the specific tax regulations and bilateral tax treaties (their main object is to avoid double taxation). Another example: you are a UK citizen and move to Germany for a project for 7 month, while keeping your flat in the UK. You are now taxable in both countries, and with your total worldwide income. To avoid this possible double taxation, the UK and Germany made a tax treaty and according to it's rules you will only be taxed in one country.
The US is an exception here, because they don't tax only by residency but by citizenship. Other countries (at least in the EU) treat this "taxable" question similar.
retirement income is not taxable. Money earned from overseas not taxable until 3 years here.
I looked into this as i have financial investment income from overseas. The answer is that under "normal" residency, income from abroad is not taxable EXCEPT for income from financial investments. However, if you have Investor Residency (Residencia por Inversion) then income from financial investments is not taxable. To quality for Investor residency, the easiest route is to show US$ 2000 income per month from abroad for renting properties. I have this residency and have never been taxed in DR.
To my understanding, the only visa category which exempts you from paying tax on foreign investment income is Residencia por Inversion. Most people will tell you that you will be unlikely to be taxed on foreign investment income, even if you have a "normal" residency. However, this government is getting much better at taxing people so I would strongly recommend you get the Investor Visa if you have financial investments abroad.
To my understanding, the only visa category which exempts you from paying tax on foreign investment income is Residencia por Inversion. Most people will tell you that you will be unlikely to be taxed on foreign investment income, even if you have a "normal" residency. However, this government is getting much better at taxing people so I would strongly recommend you get the Investor Visa if you have financial investments abroad.
Fiocco asked precisely " ARE INCOMES FROM ABROAD TAXABLE IN DOMINICAN REPUBLIC? (financial products , property...?)"
he is referring if he has to pay taxes on income from overseas in DR. This answer is clearly NO! For sure he already searched for the answer how income will be treated in his home country. Each country has different laws....
he is referring if he has to pay taxes on income from overseas in DR. This answer is clearly NO! For sure he already searched for the answer how income will be treated in his home country. Each country has different laws....
I just found this detailed article (apparently from Guzman Ariza):
http://www.coralbayrealestate.com/index.php/faq-s/retirement-benefits.html
http://www.coralbayrealestate.com/index.php/faq-s/retirement-benefits.html
No, I don't think that is true. You need to file a US tax return regardless if you are claiming that you have no taxable income. If you live in the DR full time and earn an income you need to declare that income and also file an exception as a US citizen living in a foreign country. You will most likely not owe any taxes but you still need to file.
US is excluded from my statement.
you know LT - other countries tax on 'residency' not citizenship.
If your income is investment derived, in an untaxable country, you have no returns to file anywhere
Unless you carry that US passport
you know LT - other countries tax on 'residency' not citizenship.
If your income is investment derived, in an untaxable country, you have no returns to file anywhere
Unless you carry that US passport
Steve, you need to study up on your tax information.
This forum is more international than you might expect.
I suspect many people here are tax free*
This forum is more international than you might expect.
I suspect many people here are tax free*
As regards to U.S tax payers, we need to file taxes every year even if you reside outside the U.S.
The tax form for U S. Tax payers is U.S. Citizens living abroad and as long as your gross income isn't over $100,000.00 per year you don't owe taxes. Go over you that amount and you pay taxes on your whole income.
I have a family member who has filed this way for 15+ years.
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The tax form for U S. Tax payers is U.S. Citizens living abroad and as long as your gross income isn't over $100,000.00 per year you don't owe taxes. Go over you that amount and you pay taxes on your whole income.
I have a family member who has filed this way for 15+ years.
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If your Canadian you have to report the property to Canadian gov. even if no income is from it 
*
*More misinformation. *NO! NOT EVERY US CITIZEN NEEDS TO FILE!!!
https://www.irs.gov/uac/do-i-have-to-file-a-tax-return
Why would the IRS have a web site titled "do-i-have-to-file-a-tax-return" if everyone always needed to file one?*
Winde, This is the IRS website for US citizens living outside the US
https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad
This website provides the info needed for US citizens.
https://www.irs.gov/individuals/international-taxpayers/u-s-citizens-and-resident-aliens-abroad
This website provides the info needed for US citizens.