ITBIS on Condominium/Community Fees

Olly

Bronze
Mar 12, 2007
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This has just been received in our community :

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I have to inform you that our budget is in deficit and I can't give any discounts for contract maintenance fees. If you are not satisfied with the services and don't want to give us a chance to make it satisfying you will have additional expenses according to the contract. I also have to inform you that the tax legislation and monitoring for it's compliance in DR are seriously more strict now and since January 2012 I will have to charge you 16% of ITBIS on your maintenance fees.
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Can Fabio Guzman shed some light on this demand :

This is an 16% increase. These are services provided under either the original sales contract for the property or separate Maintenance contracts in a Project within an existing development . The Develoment company appears to have the sole franchise to provide these services
The services provided are : 24 hour Security, Maintenance of the common areas and Office , and Gardening and Pool cleaning.
The questions are :

1) What requirements are there for such a notice in Dominican Law.

2) If there is input ITBIS is this offset against the charges.

3) Is there any requirement for the company providing these services to have separate accounts for what is effectively a community charge.


I thank you in advance for you comments and would note that this may be a common question for Condominiums and Communities.


Olly
 

Olly

Bronze
Mar 12, 2007
1,914
104
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Dear Fabio Guzman

It would be useful to get some reaction to this problem as many may face it in the future, and indeed comments from all those in DR1.
The Condominium Law 5038 of 1958 does not seem to shed any light on this aspect and it is not clear that our community is structured in line with this law.

Olly
 

Gordon

New member
Jan 24, 2011
318
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0
Paying taxes can be painful and always a hot topic but at least in most civilized countries you do actually get some sort or service for property taxes paid. Can anyone elaborate on what the tax legislation says that these taxes are to to used for?

It would be nice to think that if condominiums begin to pay substantial taxes then the government return some of the investment in some things like paying policemen wages adequate to feed themselves without being on the take. 16% seems a lot. Already we do our own garbage collection and water supply so what are the taxes for? They have started to collect dump fees at the municipal dump with an rather informal system.

Is there any sort of distribution of these tax dollars collected to the various levels of government, local vs regional?

Is there currently any organization among the condominium administrators that might be working to lobby where these tax dollars are spent? If no one asks, any chance of proper distribution is minimized even further.
 

Abuela

Bronze
May 13, 2006
1,955
289
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ITBIS should be charged on condo fees. That's the law. However, there is one component of the fee that should be exempt: electricity for the common areas.
I'm confused, condo fees pay for goods and services for which ITBIS is already paid icluding fuels and utility costs and payrolls items. The fees comprise the budget for the owners so in affect we the condo owners are our own customers and the funds go into a condo bank account. How on earth is this budget a sales taxable item ?
 

Acira

Silver
Sep 20, 2009
2,510
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www.blazingfuries.com
It would be nice to think that if condominiums begin to pay substantial taxes then the government return some of the investment in some things

It would be nice for me to know also where my 21 % VAT is going to be spend on in Belgium either, alas, I and 99,99999 % of the other Belgians have no idea :)
 

Contango

Banned
Dec 27, 2010
2,196
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I got lucky my development is "qualifying" for the "10 year tax abatement" on "property Taxes".. However we still pay condo fees.
 

Olly

Bronze
Mar 12, 2007
1,914
104
63
Dear Fabio,
Thanks for the clarification.
It really got the rest of you going - lets have some constructive stuff now on this !

Not all the questions have been answered - so add your comments

OLLY and the Team