US auto imports no duty after Jan 2010, read important info on this!

[Golfer]

I guess I'm missing the point

If import duties are applied to vehicles with less than 35% US parts and not applied to vehicles with greater than 35% US parts then DR-CAFTA will have provided a competitive advantage to US manufactured vehicles. If the subsequent licensing and taxes are applied equally to all imported vehicles then the US manufactured vehicles will have maintained their advantage. Furthermore, if the net cost of importing a US manufactured vehicle shows little change after the implementation of DR-CAFTA then the importation of a non-US manufactured vehicle will necesserily be significantly more expensive because of the import fees in addition to the same taxes and licensing. I would think that DR-CAFTA could not deprive a soverign nation of imposing a license fee to all vehicles registering for the first time in that country. The purpose of the treaty is to create a favored status for goods and services originating in the two countries but not to ensure that the end consumer recieves a cheap price.
What I can't understand is that since these added costs are making cars unaffordable for most Dominicans and are universally despised by Dominicans why no politicians are running for office pledging to eliminate them. Instead of people mindlessly parading around with red, white or purple banners you would think someone could get elected with this as a cornerstone of their platform.

 

[A.Hidalgo]

Windeguy from what I've read about this subject I agree with your conclusion, but seems to me that people get easily mesmerize by PICHARDO'S rhetoric. I am immune to his grandiosity.

 

[suarezn]

An extremely well organized & detailed response!! Well done.
* The Obama administration is always appointing a "czar" to deal with any economic or financial problem perceived by his administration.
I am recomending that Pichardo be appointed "DR Car Czar"!
* My suggested salary for Pichardo? US $125,000. / year, + 6 weeks vacation, + a $90,000 pension after 10 years! Are you available?
* If so, email Rahm Emanuel or Joe Biden!

No self respecting Dominican government official would work for that little money. You'd at least need to throw in there a few tax exemptions to ship down a couple of Ferraries or Bentleys a year to bring it up to par with the other "salaries".

 

[Rosario Pe?a]

Correct information on CAFTA-DR and other D.R. taxes

The information posted by Pichardo is not correct. The ITBIS (Impuesto a la Transferencia de Bienes y Servicios) is a tax paid by all products and services of the D.R. (with the exception of some agricultural/food items and education, health, and transportation services). Products manufactured in the D.R. have to pay ITBIS, this tax (with is similar to a VAT in other countries) is a LOCAL tax, not subjected to be modified by any free trade agreement and has been in place in the D.R. many years before CAFTA-DR. Therefore, paying the 16% ITBIS can not be considered a violation of the agreement. Regarding the registration fee of 17% for the First Matricula, this is another local tax that have to be paid by ALL NEW VEHICLES imported into the D.R. and was not comtemplated in the agreement. There is another tax that levied to ALL vehicles and to many other items and services (10% to Telecommunication services): the Selective Comsumption Tax, which for vehicles goes up to 60% and is based on the CIF value of the vehicle. The advantage for American vehicles is that vehicles from other countries have to pay 20% of IMPORT TAX Vs. the 0% applied to those that qualify under CAFTA-DR.

 

[Golfer]

Dealer margins?

If I can import a new $20,000 vehicle to the DR as a US citizen by paying $500 freight, 16% IBIS, and 17% registration tax how can a dealer import any cheaper. I think they used to get a customs break but now with no import fee how do they carve out a profit?

 

[playacaribe2]

Probably because....

If I can import a new $20,000 vehicle to the DR as a US citizen by paying $500 freight, 16% IBIS, and 17% registration tax how can a dealer import any cheaper. I think they used to get a customs break but now with no import fee how do they carve out a profit?

the new car dealer is buying direct from the manufacturer and you would be buying from a dealer and paying their markup already (dealer margin as your heading states).

And, although it has not been mentioned, you would in essence be bringing in a used vehicle with a Title, as opposed to the dealer bringing the vehicle in under a Certificate of Origin. A vehicle with a Certificate of Origin would qualify as new, but Aduana may classify a vehicle with a Title as used...and that may not qualify the vehicle under DR/CAFTA.



Respectfully,
Playacaribe2

 

[dperezjr]

vehicle made of origin

How can i figure out if my vehicle is at least 35% American made?
I have a 2004 Lexus RX 330

 

[playacaribe2]

A vehicle identification number (VIN)...

How can i figure out if my vehicle is at least 35% American made?
I have a 2004 Lexus RX 330

that has a 1, 4, 5, as a beginning number is American made. A Japanese made vehicle starts with the letter J, Canada with a 2, Mexico 3, Germany W, Italy Z.


Respectfully,
Playacaribe2

 

[Golfer]

What I was told

Two different shippers have told me that you need to purchase a vehicle near a shipping port, eg: Miami or NY. The shipper will pick it up at the dealer and drive it to their dock. You pay no state sales tax because the vehicle is designated for export and you do not have the expense of titleing the vehicle in the US. This only works if shipper picks up the vehicle. If you know the model and pricing you want you can handle the entire process remotely. No fuss no muss.

 

[DavidZ]

How can i figure out if my vehicle is at least 35% American made?
I have a 2004 Lexus RX 330

You are out of luck anyway...the vehicle is over 5 years old.

 

[rickboz]

Import as Resident

Two different shippers have told me that you need to purchase a vehicle near a shipping port, eg: Miami or NY. The shipper will pick it up at the dealer and drive it to their dock. You pay no state sales tax because the vehicle is designated for export and you do not have the expense of titleing the vehicle in the US. This only works if shipper picks up the vehicle. If you know the model and pricing you want you can handle the entire process remotely. No fuss no muss.

What about importing my vehicle under the residency laws. Does this also apply for $0 duty if American Made ?

 

[TheHun]

I just checked the DGA website for the estimated fees to import a 2006 Ford Mustang and there is still 20% duty.
Also Toyota now manufactures 10 vehicles in North America: the Avalon, Camry, Corolla, Matrix, Sequoia, Sienna, Solara, Tacoma, Tundra, and Lexus RX330.
However if you enter a 2006 Sienna on the DGA website it will be identified as a Japanese car - also added 20% duty. WTF???
Is that whole "no duty after January" a BS, or DGA is so lame to update their website??
So even now there is a 20% duty (on US made vehicles), 16% ITBIS and about 17% registration / license plate / title fee added to the estimated price - beside the fact that they are estimating the value about 20% higher than you can actually buy the car in the US.
Does anyone have an official note about the duty free US goods?

The Hun

 

[PICHARDO]

My research has led me to the same conclusion. There is nothing illegal and against DR CAFTA that is done by the DR Government charging its taxes (ITIBIS) and first placa fees on ALL vehicles entering the DR. From everything I can see PICHARDO is not correct on this one from what I have found out.

US autos that meet the requirements do have a competitive advantage since they will pay less duty versus other countries imports with which the DR government has no equivalent free trade agreement. I have no idea what the duty is or will be for Japanese, Korean, Chinese, etc made vehicles so I cannot speak on that . I expect it will motivate free trade agreements between those other countries and the DR.

The DR government simply wants that revenue and does not care if cars are too expensive for its people.

I would like to be proven otherwise, but I believe the information I posted is reliable and correct.

I'm back!

There's nothing illegal according to DR-CAFTA for the DR to have a 17% first registration and certain part of the ITBIS levied against the US made vehicles. The problem is that the ITBIS partials and about 17% registration fee were imposed on vehicles after the articles under DR-CAFTA were being negotiated and ratified by all participants. That's to say that the DR provisioned "NEW" tariffs under the cover of local applied fees and taxes, when in fact no such fees were required/applied at the time of the DR-CAFTA negotiations in the first place.

Why? The first registration fee can be argued by some here as universally applied to all competitors/origin equally. Not so fast! The DR already imports lower valued/crafted vehicles from Asian markets than from the US. That's because US/Canada manufactured vehicles are mandated to incorporate certain designs and systems not offered/required in those other manufacturing nations, which supply the DR market with the goods.
US/Canada (partially) built vehicles are more expensive than those same models manufactured NOT for the US market, which our importers buy in larger numbers.

The ITBIS parts applied to vehicles have to deal with certain levels that details within the industrialized goods VAT. ITBIS by itself is not a single TAX applied universally to all goods/services sold/traded in the DR. ITBIS is a multi-level VAT segment which was left in place after local industry was and still remains the single most important source of tax revenues for the Dominican IRS. That's to say that the majority of biz in the DR is out in the informal market, therefore very hard to collect the same VAT program on.

Take for example the agro industry of the DR, where ITBIS is not fully imposed on trade o that sector, but a single format of VAT present in the overall ITBIS formula. That means that while some VAT included in the ITBIS is collected, others VAT are not within the same tax program it projects.

By simple and lawful implementation of the VAT in the ITBIS formula, some levels of the taxes must not be applied until the point the importer/sole owner sells the rights of the vehicles one transaction away from him. When they buy the vehicle in the US, the owner pays that local government taxation on the goods, which according to the articles under DR-CAFTA must NOT be double charged/repeated in the imported to member nation.

I never implied that the whole ITBIS program was not applied to the DR-CAFTA article on vehicles from the US, but that a big slice of it was indeed being applied as double taxation in violation to the DR-CAFTA trade agreement.

As far as ITBIS, the amount to be paid can't be made out to be from the total of the vehicle's real cost in the purchased market atop the first registration fee (which itself lost complete legal basis since there's no longer a tariffs value to guide such charge any longer).

Already a US citizen has contacted me in Miami and is moving towards a challenge in the US courts to the DR-CAFTA, based on the ITBIS and first registration/placa charges as I reported here. He did import the vehicle under the principle of origins and avoided payment of the ongoing disputed tariffs, which is still being applied to vehicles unable to satisfy that requirement fully.

Is very simple: The DR enacted the first placa registration fee while conducting negotiations with then CAFTA member countries. The sole principle under the spirit of the trade agreement was being violated by the DR, while it was seeking to have open market reach into those same nations.

What makes the first placa/registration fee illegal is not that it was made to replace the loss in tariffs collections, but how it was introduced while a trade agreement was negotiated and the DR included in good faith to open markets of the region. While it might seem as an equal tax across the board to all car manufacturing nations exporting to the DR, the US is not competitive against those markets under the conditions described above.

The same takes place with a chunk of the ITBIS taxation program and the imports. Anyhow you slice it; people are being charge doubled the tax by having to pay at both ends the same, which is not what DR-CAFTA meant at all.

You expats too busy burning tires around my neck can take a walk from your riots. Already a real lawyer-guided interested party in the US took the call to arms, to fight for all of us, Dominicans included the most...

 

[Afgan]

I'm back!

There's nothing illegal according to DR-CAFTA for the DR to have a 17% first registration and certain part of the ITBIS levied against the US made vehicles. The problem is that the ITBIS partials and about 17% registration fee were imposed on vehicles after the articles under DR-CAFTA were being negotiated and ratified by all participants. That's to say that the DR provisioned "NEW" tariffs under the cover of local applied fees and taxes, when in fact no such fees were required/applied at the time of the DR-CAFTA negotiations in the first place.

Why? The first registration fee can be argued by some here as universally applied to all competitors/origin equally. Not so fast! The DR already imports lower valued/crafted vehicles from Asian markets than from the US. That's because US/Canada manufactured vehicles are mandated to incorporate certain designs and systems not offered/required in those other manufacturing nations, which supply the DR market with the goods.
US/Canada (partially) built vehicles are more expensive than those same models manufactured NOT for the US market, which our importers buy in larger numbers.

The ITBIS parts applied to vehicles have to deal with certain levels that details within the industrialized goods VAT. ITBIS by itself is not a single TAX applied universally to all goods/services sold/traded in the DR. ITBIS is a multi-level VAT segment which was left in place after local industry was and still remains the single most important source of tax revenues for the Dominican IRS. That's to say that the majority of biz in the DR is out in the informal market, therefore very hard to collect the same VAT program on.

Take for example the agro industry of the DR, where ITBIS is not fully imposed on trade o that sector, but a single format of VAT present in the overall ITBIS formula. That means that while some VAT included in the ITBIS is collected, others VAT are not within the same tax program it projects.

By simple and lawful implementation of the VAT in the ITBIS formula, some levels of the taxes must not be applied until the point the importer/sole owner sells the rights of the vehicles one transaction away from him. When they buy the vehicle in the US, the owner pays that local government taxation on the goods, which according to the articles under DR-CAFTA must NOT be double charged/repeated in the imported to member nation.

I never implied that the whole ITBIS program was not applied to the DR-CAFTA article on vehicles from the US, but that a big slice of it was indeed being applied as double taxation in violation to the DR-CAFTA trade agreement.

As far as ITBIS, the amount to be paid can't be made out to be from the total of the vehicle's real cost in the purchased market atop the first registration fee (which itself lost complete legal basis since there's no longer a tariffs value to guide such charge any longer).

Already a US citizen has contacted me in Miami and is moving towards a challenge in the US courts to the DR-CAFTA, based on the ITBIS and first registration/placa charges as I reported here. He did import the vehicle under the principle of origins and avoided payment of the ongoing disputed tariffs, which is still being applied to vehicles unable to satisfy that requirement fully.

Is very simple: The DR enacted the first placa registration fee while conducting negotiations with then CAFTA member countries. The sole principle under the spirit of the trade agreement was being violated by the DR, while it was seeking to have open market reach into those same nations.

What makes the first placa/registration fee illegal is not that it was made to replace the loss in tariffs collections, but how it was introduced while a trade agreement was negotiated and the DR included in good faith to open markets of the region. While it might seem as an equal tax across the board to all car manufacturing nations exporting to the DR, the US is not competitive against those markets under the conditions described above.

The same takes place with a chunk of the ITBIS taxation program and the imports. Anyhow you slice it; people are being charge doubled the tax by having to pay at both ends the same, which is not what DR-CAFTA meant at all.

You expats too busy burning tires around my neck can take a walk from your riots. Already a real lawyer-guided interested party in the US took the call to arms, to fight for all of us, Dominicans included the most...

Thank you for being brutally honest and untolerant to our high level government crooks. We need clear instructions how to fight to bring our local car prices way down, where they belong.

 

[Afgan]

class action

A Class action at an American Court is needed.

To show them that USA is not a piggy-toy to fool around.

 

[rh8371]

Hi all,

This has been a very interesting thread to read and very informative. I have read all the post and news articles but I still didn't get an understanding of how this applies to US Made Spare parts (batteries, parts & Tires). As I have a model vehicle not readily found in the DR I need to get most my parts off the internet shipped in from the States. What I need to know is what to expect once the package arrives at DHL/FEDEX or UPS. Will they demand I pay the customs on the part and if not is there another tax that they will charge/impose or force me to pay before releasing my package?

On another note if I do find the part for my 2005 Chevy Suburban 2500 series at Santo Domingo motors how do I know if I'm being charged the customs tax? Does anyone here know where other than Santo Domingo Motors one can find parts for my particular vehicle? Maybe that's another Forum?

Thanks

 

[Hipocrito Mejia]

I just checked the DGA website for the estimated fees to import a 2006 Ford Mustang and there is still 20% duty...
Is that whole "no duty after January" a BS, or DGA is so lame to update their website??
So even now there is a 20% duty (on US made vehicles), 16% ITBIS and about 17% registration / license plate / title fee added to the estimated price - beside the fact that they are estimating the value about 20% higher than you can actually buy the car in the US.
Does anyone have an official note about the duty free US goods?

Just spoke to someone at the DGA regarding this issue and was told the following:

If you are importing a vehicle under DR-CAFTA, you need a "certificate of origin" confirming that the vehicle is of at least 35% American and/or Canadian origin.

You would then be charged as follows:

- 0% import tax

- 16% ITBIS on the CIF value of the vehicle. Normal charge is 16% of (CIF value + 20% import tax) i.e. Normally, they charge ITBIS on the 20% import tax also.

- 17% first placa charge

 

[bob saunders]

Just spoke to someone at the DGA regarding this issue and was told the following:

If you are importing a vehicle under DR-CAFTA, you need a "certificate of origin" confirming that the vehicle is of at least 35% American and/or Canadian origin.

You would then be charged as follows:

- 0% import tax

- 16% ITBIS on the CIF value of the vehicle. Normal charge is 16% of (CIF value + 20% import tax) i.e. Normally, they charge ITBIS on the 20% import tax also.

- 17% first placa charge

Is this the same if you are a returning Dominican? My wife (Dominican) and I are thinking about bringing in my American built 2007 Toyota RAV4.

 

[Hipocrito Mejia]

Bob, that's a whole different scenario. If you choose to do it under the DR-CAFTA, my post applies. If you do it under law 168, then you'd be entitled to a reduced (not 0%) import tax.

 

[Hipocrito Mejia]

My problem now is getting my hands on a certificate of origin. I'm planning to buy a 2007 Ford for export to DR, and I contacted Ford about obtaining the certificate of origin, but was told that they only issue it once, to the original dealer (owner), so now I'm stuck.

How do I get my hands on the certificate of origin? Any ideas?