(REALLY long)
I am no genius, but I read the laws
that can negatively affect my life if I am too lazy to not know them.
I pay taxes in the DR = Plenty of them. I am legally required to do so
as a resident who lives and works here in the DR. >Income taxes
(the top rate is at 25%, for now) > ITBIS = 12% on most purchases,
( but things like rice and beans and other basics in the supermarket
are not hit with this), THIS TAX was started by Leonel at 8 %. Hipolito raised it to 12% effective January 2001. >gasoline taxes that are used to service foreign
debt, >vehicle taxes (however the more costly part of licensing a
vehicle is wasting the better part of a day to go and do this every
year), >toll taxes in and out of Santo Domingo, just raised from 5 pesos to 15 pesos on private cars, >about 15% tax on all airline tickets, and Hipolito is talking
about soon tacking on another 12% on top of this tax as a luxury,
>property taxes, (yes there are annual property taxes if your
property is worth more than RD$1.3 million, or if your building doesn't
cover more than 30% of the surface area of the lot for city
properties, and if you don't believe it, wait until the day you want
to sell a property like this, and can't get your title transferred
until you pay up along with penalties, and then there is >Rental
property income tax on the rent collected.
Companies must pay> IDSS -this is social security taxes, >workers
insurance, >severance pay of 21 days pay per year employed, >28 days
Preaviso if you are going to shut down operations, >14 days vacation
for the first 5 years employment, >about 11 or 12 holidays a year,
>a month's pay for Christmas Bonus, > 10 % of profits to the
employees every year, > 1.5% of gross revenue upfront as a tax to
the DR government (if your company nets 10% profit, you can figure
that you just paid 15% of net profit as corporate income taxes in
the DR. =General Electric had revenues last year of what, probably
80 BILLION dollars, and paid less corporate income taxes to the US government
( USD $-0-) than a mildly successful colmado is forced to pay
(1.5% of estimated revenues) to the DR government every year, UPFRONT. Hipolito started this practice of forcing every company who has revenue over RD$600,000 a year to cough up the dough BEFORE they make it.
Before you believe that ANY government will EVER lower or eliminate a tax they put in place, do this. Right now, go to your kitchen and look at the fosforos by the stove. One of the first taxes they put in place as a "luxury" tax in the old days was on matches, and in the DR they still pay this tax today, 100 or more years later, of a few centavos per package.
And one last thing, go read the fine print about your new Dominican
Residency = that part about how after 3 years, you will be legally
required to file an annual return listing all of your assets, in
the DR and internationally, and then paying an annual asset tax if you
really want to be legal about it. Don't believe me, just go read the
laws or ask your attorney. Check out the DGII website.
Soon to come (November 1st) is a new government=required, mandatory
health insurance plan that will cost about 11% of payroll for all
employees, including the owner, AND a government-required pension
plan that will also end up costing about 16% between the employee
and the employer's contributions.
I call this "continuously rising taxes" , and so would any reasonable
person reading this.
As far as US taxes, as a US citizen working outside of the US and
its possessions, you receive the Foreign Earned Income Exclusion as
long as you file your annual 1040 along with the 2555 form, and
others. That will eliminate income taxes on the first $80,000 of
foreign earned income this year. If you don't file the 1040, and the
IRS finds this out and notifies you before you file, you may LOSE
the exclusion and be taxed on the full pop. Go read the IRS laws,
and the instruction book for the 2555 form. Yea, yea it will never
happen, right?
BUT, my friend, what about the FICA taxes? If you are employed by
a US company, you must still pay 7.65% to the US Treasury for the
Employee portion of the FICA tax. That isn't exempted. And if you
are self=employed here, you MUST STILL pay the US 15.3% for the full
pop on FICA. I call that a tax, and so would any reasonable reader.
Get studying pal.
And then you state, investments in the DR banking system are tax=free.
This is true. Tax=free to the DR government, BUT NOT tax=free to the
US government. You still must report that interest as passive earnings
and pay income taxes to the US with your 1040 and Schedule B.
Have you done this if you are required to?
Oh, and another thing Jazz= if you ARE socking your money away into
the DR banks to earn great "tax=free" interest, did you also remember
to file your Foreign Holdings report annually with the US Treasury,
giving them the amounts and all foreign account information as well,
so they can keep track of your money?
Yea, yea, only a sucker would do that right? Are you kidding, after
9/11 they are tracking all money intensely, and the DR is helping
them do it with US citizens/residents. If you have more than $10k total
in foreign accounts and don't report, what can happen? Oh yea,
that's called a FELONY under the US laws, and if you are convicted,
kiss your US Passport goodbye forever. That should make your travel
planning easier.They will want you right where they can put their
thumb on you, and John Ashcroft would do it in a heartbeat, to make
some poor sap like you a Poster Boy for Big Brother, to help make the
Homeland secure, and to get a bigger budget next year.
As far as credentials, I have 10 years experience in buying and
selling goods internationally, and then shipping them in both
directions by the container load, to and from the US, Canada and
other nations via both ocean freight and air freight, and I do all of the paperwork involved.
I understand the tax laws and employment laws in 3 countries so far. (PS Jazz- if you
did set up a Dominican company as you were suggesting earlier in
the year, here on DR1, did you also report your new Dominican company
on your IRS tax returns as a foreign controlled company as they
require you to do, or was that a line of bullshit to fill up a few days
too?)
As far as retaining my US citizenship, I don't want ANYTHING (Other than something in return from Social Security for which I have paid) from the
US Government, except to be left alone to live my life as I choose to
live it, without their interference and without being forced to pay
even more taxes to them.
Oh, almost forgot. When I turn 65 here in the DR, I am planning on
popping out three more kids. I won't have to pay. You see, as the
"Below 18 years of Age children of a 65+ year old recipient of
Social Security", my newest children will be entitled to receive 50%
of my benefit, up to a maximum total payout of 150% of my benefit
until they turn 18 years old. Truly twisted, but they wrote the laws.
Let the Games Begin!
I will still receive the Social Security benefits that I have already
PAID FOR, and I
don't think that I will have any trouble finding 3 very beautiful
18 year old dominicanas who want to have a baby and as part of the
bargain they will each receive (in current dollars) about RD$16000 a
month for the next 18 years. That's better than being a bottle for
the DR government, and you don't even have to vote to get it. The
children I have now will already be over 18, so they can't receive
this wonderful gift from me AND Uncle Sam. I will do my part to end
poverty in the DR, and help 3 dominican families in the process.
Hell, the chicas may pay ME to do it. hehehe- imagine a 65 year old
Gringo Sankie.
I have no intention of insulting you here Jazz. I don't really care
about who you are, or what you believe in, or what you do. But I
do care about information getting posted here on DR1 being accurate.
I now fully expect you to start digging to find something that I
have written here that is miswritten, or incomplete. Go for it.
Maybe you will truly get an education about this in the process, that
applies to your situation. I understand my own situation and am doing
everything possible to avoid problems for me.
edited by Pib to add: Rule no. 1.b
applies to all of us. No personal attacks please.
(and later, portions deleted containing personal information about Gringo that doesn't really matter to anyone else).