Help with ISR/ITBIS please

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Pinky101

New member
Mar 11, 2007
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Hi,

I'm new to this forum so please be patient as I work my way around.

In the mean time, I do have a couple of questions.

I have a small building in Santo Domingo. It's got a total of 7 units (4 business and 3 residential).

I also have someone to manage the property since I live in NY.

This person told me that there is now something called 10%ISR and 16%ITBIS.

My questions are:

1. Am I responsible for both taxes?

2. I pay 10% administration fee to my property manager. If I now have to pay these taxes, do I pay her 10% of the net or of the gross?

Just a bit confused.

Thank you in advance for your help.
 
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Fabio J. Guzman

DR1 Expert
Jan 1, 2002
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This is not something new.

ISR means Impuesto sobre la Renta or Income Tax. You should pay taxes on your net income from your property. Rates vary from from 15 to 29% percent. The 10% your manager mentions could be the amount to be retained by your tenants and paid directly to Internal Revenue.

ITBIS is a value-added tax (VAT), very common in most countries except the US. The rate is 16% and should added to most goods and services, including rent.
 
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MommC

On Vacation!
Mar 2, 2002
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If you know of persons who are renting properties but not remitting any tax to the gov't to whom should it be reported??
Also if one is renting out properties do they need to register to pay the tax and where would they go to do so?
 
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Pinky101

New member
Mar 11, 2007
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Thank you Mr. Guzman.

I think I get it now.

My tenants pay the ITBIS and I pay the ISR 10%.

What I pay my property manager is separate from these.

MommC, that's a good question!
 
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acmiller

New member
Mar 29, 2007
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DR Income tax on Rental Income, Non-Resident.

I read else where that a non-resident would need to pay 30% DR income tax on the gross profits from a DR rental.
In Mr. Guzman's post he refers to net profit. I assume this means the profit left over after all operational expenses are subtracted. Is this correct for a non-resident or resident?
thanks.
 
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Fabio J. Guzman

DR1 Expert
Jan 1, 2002
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In general, payments to nonresidents are subject to a 30% withholding on GROSS income (Article 305 of the Tax Code). If you were a resident, taxes would be calculated on NET income instead.
 
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