Moving to the Dominican Republic Soon

Good Evening!

My family and I are moving to the Dominican Republic (Santo Domingo) by the end of the year. Without going into too much detail, I have secured employment, and we will be making Santo Domingo our home for the foreseeable future. We've narrowed down our apartment search to the Pol?gono Central. It seems that as I've been doing my research and due diligence, I've compiled quite the list of questions. I've also been fortunate to stumble across this site; and I must say that this community has been of great help since I first starting reading sometime in early March of this year. Would you all be willing to help me with some of my questions? I'm gringo de pura cepa, sin embargo hablo castellano con fluidez y sin problema. Era gerente de un equipo de 20 hispanos donde trabaj? mientras estudiaba espa?ol y relaciones p?blicas en la universidad. He pasado tiempo en Venezuela trabajando en los Andes. He viajado extensamente. jMi esposa habla con fluidez, tambi?n, debido a sus estudios en Sevilla.

But enough with that. We have a mont?n de preguntas, and you guys are the experts. I'm humble enough to realize that I'm no expert and need to remain vigilant. In all, I've spent about 30 days in all in the DR over about three different trips over the past two years. As I'll be posting more as time allows, I do have one quick question. What are some of the restrictions on the importation of a brand new vehicle? I know that a vehicle that is over five years old is not allowed, but what are the tax/duty implications? My employer in the DR will be obtaining my residency. I've heard conflicting stories, so could you guys please shed some light?

?Much?simas gracias desde el fondo de mi coraz?n!

Thank you, Tashi, for your response. My employer is, in fact, taking care of the residency process for each of us. That looks like a tremendous blessing. We've not yet bought a car, but I do know that the car that I currently drive does not meet the requirements (1999 year/model with 109k miles). Some of our biggest, least clear questions are those centered on our move. More than likely, we'll be shipping our items in a container. Will we have to pay duty on all of our possessions (furniture, appliances, clothing, electronics, etc.)?

Concerning taxes: What are you US expats who have a US income and DR income doing? How does the IRS treat the income that you earn in the US and in the DR? I've read that one is responsible for reporting his or her income from all external sources. I know I'll have to pay US Federal Income tax on the US side of my income but what about the Dominican side? Also, what are the Dominican tax brackets? I've read, also, that benefits (cell phone, housing allowance, for example) are subject to income tax in the DR. Is this true? Thanks, again, for your help. You guys are certainly a tremendous aide.

I've poked around on the IRS site a bit, and it does have some good information. It seems, though, that everything is not quite as clear as it could be. Lots of "may" and "perhaps" are included in the language. I'm to the point where I'm going to pay to meet with a local accountant who specializes in expats with dual sources of income (in my case a US side and a DR side). Great recommendation, though. I appreciate it.

Thanks, panas, for all the replies. I knew that you all would be a wealth of information. My employer will be help with the move costs, a tremendous blessing. One of my friends in the DR who has dual citizenship and has just recently moved back to the DR from the US (shipped all items on one of the half-size containers) told me that it according to his experience and investigation, it's not much more expensive to ship the full-size container. That (and the horror stories I've read on this site about vehicles in the DR being flood vehicles or odometer roll back vehicles or damaged vehicles, etc.) is what was driving my decision-making process on a car. We were actually thinking about something like a KIA Soul or Sportage or a Toyota RAV4. We were planning on buying in the States due to the fact that we'd know the exact history of the car. What are the tax implications on a $17,000 KIA Soul, for example? I seem to have some a decent amount of these vehicles in the DR during my various trips.

Concerning taxes, the info I've gathered concurs with much of what you guys are saying. My tax situation will actually begin at the beginning of 2015 as I start January 1st. To receive the +/- $100,000 tax exemption on foreign-earned income, one has to be a "bonafide" resident (in my case in the DR). I'll meet the qualifications of bonafide residency in the DR. It looks like I'll also be able to deduct reasonable housing expenses. And, mountainannie, it looks like we think similarly. I'm meeting with an accountant soon, one who specializes in expat cases. I should have a better idea of the tax situation soon.

It looks like the income tax brackets in the DR are graduated up to 25%. That is, the highest income tax that an individual can expect to pay on his or her income is 25%. I've also read (although this is a bit fuzzy) that benefits are also taxable (benefits like a housing allowance or a cell phone). Is this true? Thanks guys for all the help. I really appreciate it.

Tashi Siu's Dad said:

According to Fabio J. Guzman, our resident legal expert, in his article "An Overview of Dominican Tax Law" in Tax Notes International in February 2008: Dominican income tax law is primarily territorial. All income derived from work or business activities in the D.R. is taxable, no matter if the person is a Dominican, a resident foreigner, or a non-resident foreigner. Income derived from work done OUTSIDE the Dominican Republic by Dominicans or resident foreigner, is NOT taxable in the Dominican Republic. For tax purposes, any person residing in the Dominican Republic for MORE THAN 182 days in a year is considered a resident. The article is VERY informative about Dominican Tax Law. You can PM Dr. Guzman if you have any further questions regarding the laws here in the D.R.

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For some reason, I skipped over this response. This is very informative. Thanks for the post.