- Thread starter Kipling333
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Avoiding tax
yes you are right Mauricio...and sorry I used the word avoidance rather than evasion.. i just followed an article that caught my eye and which I agreed with.
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I don't think itbis applies for inmobiliaria. The other taxes you pay you can't get back, only itbis, since it's a tax for the end consumer
ITBIS returns are submitted monthly. They show the tax you have charged on your sales and you are allowed to deduct from that ITBIS the ITBIS on the cost of those sales. Most property companies are set up to hold domestic houses so you are making no sales you can charge tax on. If however you rented out to tourists that would be different.
As far as I am aware you never get ITBIS back in cash. If you pay more than you earn (not uncommon for new businesses) the credit is carried forward to use against future payments.
ITBIS returns are submitted monthly. They show the tax you have charged on your sales and you are allowed to deduct from that ITBIS the ITBIS on the cost of those sales. Most property companies are set up to hold domestic houses so you are making no sales you can charge tax on. If however you rented out to tourists that would be different.
As far as I am aware you never get ITBIS back in cash. If you pay more than you earn (not uncommon for new businesses) the credit is carried forward to use against future payments.
Correct, they don't give back cash, only deduct from what you owe. What I meant with it is not applying to real estate was that when you buy a house no itbis is involved, unless it's a new one. You pay transfer tax, but no tax for 'added value' since no value is added by selling a house to someone else.
and DGII offers their own numbers:
http://www.diariolibre.com/economia...ion-del-itbis-en-el-pais-es-de-29-7-YG3967375
I have a different interpretaion . I think the authorities know full well that there is nothing that they can do about the 20% or so of evaded taxes because it is in the cash community . goods sold from backs of trucks or in the markets where no ITBIS is charged . With the huge increases in prices over recent months in the Spanish owned supermarkets, it is very tempting to join the evading crowd..I wont but many do and will
This subject is extremely important but of little interest to most readers here but was almost lost in the news of last Friday . The avoidance of paying tax that a person or entity is obliged to pay is not thought of harshly in the same way as it is in northern american countries, Canada, Australia and even the USA . It is endemic in most latin countries and of course in the DR and ,in my opinion, is a digusting way of throwing the burden of providing government revenue from the rich to the poor.
So I was very glad to see the article on Friday recommending better compliance of existing laws rather than a range of new tax laws.
I do not know how the country can change the policies of the rich to try to avoid tax but I do know the answer to better compliance is through government computer up grades and the employment of Government tax agents to check in great detail the affairs of those who appear rich but pay little tax. It is the gathering of intelligence by the taxation office from banks, real estate agents , property records and company reports in a linked way that must be rapidly introduced. I suppose we need the expertise of overseas tax compliance officers but, I for one, will be very happy, when I see investigations into a large number of individuals who try to escape the net.
Tax avoidance is completely different than tax evasion. There is nothing wrong with tax avoidance and really everyone should be trying to avoid increasing the costs due to taxes that support a debt pyramid scheme.
Jimmy please read the posts..about six message up I said I was sorry to use avoid...it was just that the article used the word ..yes .it is completely different to evade