US and DR banks officially begin today to share info on US citizens bank accounts

RD y Estados Unidos inician oficialmente intercambio de información de cuentas bancarias reportables
22 julio, 2019//Noticias Economía, Finanzas e Inversiones.
RD y Estados Unidos inician oficialmente intercambio de información de cuentas bancarias reportables

Impuestos Internos comunicó la formal entrada en vigencia del Acuerdo Intergubernamental Estados Unidos-República Dominicana, para Mejorar el Cumplimiento Tributario Internacional (IGLA) y poder aplicar la Ley sobre el Cumplimiento Fiscal de Cuentas en el Extranjero (FATCA), ratificada por el Congreso Nacional.

La entrada en vigor del acuerdo se produce a partir de la nota diplomática emitida el pasado miércoles 17 y notificada por el Ministerio de Relaciones Exteriores de la República Dominicana al Gobierno de Estados Unidos.

El convenio regula el intercambio de información, a través de un sistema automatizado, de Cuentas Reportables entre los Estados Unidos y República Dominicana.

En ese sentido, las entidades financieras dominicanas deberán identificar las cuentas de personas físicas, jurídicas u otras entidades especializadas como los fideicomisos estadounidenses, para remitir las informaciones pertinentes al Servicio de Impuestos Internos de Estados Unidos (IRS), desglosando sus movimientos, cuentas, recibos y otras operaciones.

En tanto, Estados Unidos debe remitir al Gobierno dominicano informaciones sobre cuentas de los residentes en República Dominicana, mantenidas en instituciones financieras de ese país norteamericano.

También dispone que en caso de que las instituciones financieras dominicanas no remitan las informaciones en el marco del acuerdo, se considerarían instituciones no cooperantes y estarían sujetas a una retención de un 30% sobre todas las transferencias que reciban desde Estados Unidos, ya sean directas o indirectas.

El Ministerio de Hacienda, mediante la Resolución No. 137-2014, delegó en el Director General de Impuestos Internos las facultades de Autoridad Competente en materia de aplicación de los convenios internacionales para evitar la doble tributación y prevenir la evasión fiscal, en los convenios de intercambio de información tributaria y en el Acuerdo FATCA-IGA.

Por ese motivo, Impuestos Internos adquirió en el 2017 una plataforma tecnológica para realizar el intercambio automático de información. Esta plataforma le permitirá a la institución recopilar las informaciones financieras suministradas por las instituciones de intermediación financieras locales para su posterior remisión al IRS de Estados Unidos.

Ese mismo año la DGII impartió una serie de capacitaciones a los diferentes sectores financieros para el manejo de la plataforma y formato de envío de los reportes correspondientes. Cabe indicar que esta misma plataforma permitirá el intercambio automático con más de 130 jurisdicciones en el marco de la Convención Multilateral promovida por la OECD, una vez entre en vigencia.

Google Translation



RD and the United States officially initiate the exchange of information from reportable bank accounts
July 22, 2019 // News Economy, Finance and Investments.
RD and the United States officially initiate the exchange of information from reportable bank accounts

Internal Taxes communicated the formal entry into force of the United States-Dominican Republic Intergovernmental Agreement, to Improve International Tax Compliance (IGLA) and to apply the Law on Fiscal Compliance of Accounts Abroad (FATCA), ratified by the National Congress.

The entry into force of the agreement takes place from the diplomatic note issued last Wednesday 17 and notified by the Ministry of Foreign Affairs of the Dominican Republic to the Government of the United States.

The agreement regulates the exchange of information, through an automated system, of Reportable Accounts between the United States and the Dominican Republic.

In this regard, Dominican financial entities must identify the accounts of individuals, legal entities or other specialized entities such as US trusts, to send relevant information to the Internal Revenue Service of the United States (IRS), including their movements, accounts, receipts and other operations.

Meanwhile, the United States must send the Dominican Government information on the accounts of the residents of the Dominican Republic, held in financial institutions of that North American country.

It also provides that in the event that Dominican financial institutions do not send information within the framework of the agreement, they would be considered non-cooperating institutions and would be subject to a 30% withholding on all transfers received from the United States, whether direct or hints

The Ministry of Finance, through Resolution No. 137-2014, delegated to the General Director of Internal Taxes the Competent Authority powers in matters of application of international agreements to avoid double taxation and prevent tax evasion, in the agreements of exchange of tax information and in the FATCA-IGA Agreement.

For this reason, Internal Taxes acquired in 2017 a technological platform to carry out the automatic exchange of information. This platform will allow the institution to collect the financial information provided by the local financial intermediation institutions for later reference to the IRS of the United States.

That same year, the DGII gave a series of training sessions to the different financial sectors for the management of the platform and the format for sending the corresponding reports. It should be noted that this platform will allow automatic exchange with more than 130 jurisdictions within the framework of the Multilateral Convention promoted by the OECD, once it enters into force.

So much for "Land of the Free"!

Uncle Sam will find you wherever you are and demand his pound of flesh.

I never understood the reason why Americans have accepted to be taxed on their nationality, regardless of their global location.

Over-reaching democratic governments have long ago bought citizen acquiescence and compliance by handing them processed cheese slices paid for with their own money. Citizens will let their governments do pretty much as they please as long as the handouts continue.

beeza said:

So much for "Land of the Free"!

Uncle Sam will find you wherever you are and demand his pound of flesh.

I never understood the reason why Americans have accepted to be taxed on their nationality, regardless of their global location.

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Some fight back, but are called "greedy, uncaring raysiss..."

Big said:

Uncle sugar isn't looking for a few Xpats parking 50 or 60 thousand U.S in Banco Popular to live off. They are looking for people using large financial instruments to hide cash and avoid big fees and taxes

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IRS code specifically refers to bank accounts with $10,000 at any time during the year. That have the info. One can only hope they are looking for big fish, and not harassment of the little guys.

IF you trust them.

IMO, the key phrase there is "reportable accounts". We're careful to keep our DR account under 10K. We do still report that we have the account [on our tax return]. If it goes over 10K, we have to report the interest as income, along with the account #, Bank info, etc., PITA

AlterEgo said:

IMO, the key phrase there is "reportable accounts". We're careful to keep our DR account under 10K. We do still report that we have the account [on our tax return]. If it goes over 10K, we have to report the interest as income, along with the account #, Bank info, etc., PITA

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I recall one must report an account only if it ever has more than $10,000. We have one small account for our web dev business that has never had $10,000 in it, so I don't report.

I suppose the IRS can ask in an audit or demand letter, but now that they have access to all accounts by your SS# (or maybe Passport#), they would know already.

cobraboy said:

I recall one must report an account only if it ever has more than $10,000. We have one small account for our web dev business that has never had $10,000 in it, so I don't report.

I suppose the IRS can ask in an audit or demand letter, but now that they have access to all accounts by your SS# (or maybe Passport#), they would know already.

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There is a question on tax return...Do you have a bank account in another country. Yes/No. Next question is if it's reportable. Y/N. If you say Yes, then they want Bank name, account number, highest balance in the year, amount of interest earned, etc. If you say No, nothing else.

AlterEgo said:

There is a question on tax return...Do you have a bank account in another country. Yes/No. Next question is if it's reportable. Y/N. If you say Yes, then they want Bank name, account number, highest balance in the year, amount of interest earned, etc. If you say No, nothing else.

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That is what I mean.

Now what you check "yes" to the account question the IRS has access to it, regardless if the account is reportable or not.

cobraboy said:

That is what I mean.

Now what you check "yes" to the account question the IRS has access to it, regardless if the account is reportable or not.

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Well, I'm more comfortable saying "yes" than them finding out I lied.

Big said:

I wouldn't be too stressed, I have a Dominican account a U.S account and a Capitec account in SA, my U.S accountant says unless you are moving/hiding big coin the chances of being audited are fractional. I aint got info to hide anyway, I live at the foot of the cross....when it comes to banking

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I'm not worried. But that is different than not trusting them.

As I understand this, the financial information will flow not only from DR to USA, but from USA to DR.

Why potentially significant? Residents in DR owe up to 25% tax on investment income and capital gains.


“Income Tax Rates for Individuals

Natural persons who receive income from a Dominican source or from financial investments will pay taxes as follows:

Taxable Income (in DOP) Tax (in DOP)
0 to 409,281.00 0
409,281.01 to 613,921.00 15% of taxable income over 409,181.01
613,921.01 to 852,667.00 30,696.00 plus 20% of taxable income over 613,921.01.
More than 852,667.01 78,446.00 plus 25% of taxable income over 852,667.00”

“Capital Gains Tax

The Dominican Tax Code defines capital gain as the difference between the sale price of a capital asset and its acquisition price or production cost adjusted for inflation. In the case of assets subject to depreciation, the rate of inflation is applied to the residual value adjusted for inflation. This adjustment avoids the unfairness of having to pay taxes on the price increase due to inflation, as is the norm in the United States and other countries.

Tax rates for capital gains are exactly the same as for regular income: 27% for companies and zero to 25% for natural persons.”

https://www.drlawyer.com/taxation-dominican-republic/

If filling out the FATCA form here starts financial data flowing both ways as claimed... this could get expensive fast.


And with Dominican citizenship... tied into paying DR income taxes for life? Sure, perhaps there’s not enforcement yet... but I wouldn’t be surprised if it’s just around the corner as that info they will have in their system. Not like the old “if we don’t tell them we had income, they can’t find out”

CFA123 said:

As I understand this, the financial information will flow not only from DR to USA, but from USA to DR.

Why potentially significant? Residents in DR owe up to 25% tax on investment income and capital gains.


“Income Tax Rates for Individuals

Natural persons who receive income from a Dominican source or from financial investments will pay taxes as follows:

Taxable Income (in DOP) Tax (in DOP)
0 to 409,281.00 0
409,281.01 to 613,921.00 15% of taxable income over 409,181.01
613,921.01 to 852,667.00 30,696.00 plus 20% of taxable income over 613,921.01.
More than 852,667.01 78,446.00 plus 25% of taxable income over 852,667.00”

“Capital Gains Tax

The Dominican Tax Code defines capital gain as the difference between the sale price of a capital asset and its acquisition price or production cost adjusted for inflation. In the case of assets subject to depreciation, the rate of inflation is applied to the residual value adjusted for inflation. This adjustment avoids the unfairness of having to pay taxes on the price increase due to inflation, as is the norm in the United States and other countries.

Tax rates for capital gains are exactly the same as for regular income: 27% for companies and zero to 25% for natural persons.”

https://www.drlawyer.com/taxation-dominican-republic/

If filling out the FATCA form here starts financial data flowing both ways as claimed... this could get expensive fast.


And with Dominican citizenship... tied into paying DR income taxes for life? Sure, perhaps there’s not enforcement yet... but I wouldn’t be surprised if it’s just around the corner as that info they will have in their system. Not like the old “if we don’t tell them we had income, they can’t find out”

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I think there is an US$85,000 exemption for income earned outside the US regardless of source.

cobraboy said:

I think there is an US$85,000 exemption for income earned outside the US regardless of source.

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Actually, it's up to about $103K now, but you either have to be present here in the DR for 330 days or be a bona fide legal resident to claim it. It only applies to earned income here(or any other country).

There's also a "Foreign Tax Credit" where you can deduct taxes paid here in the DR from the taxes due in the US to help avoid double taxation. Which one is better depends on your situation.

cobraboy said:

I think there is an US$85,000 exemption for income earned outside the US regardless of source.

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I was referring to the need to pay taxes in DR on investment income and capital gains in the USA, which seems this financial info may flow to DR due to reciprocity agreement.

cobraboy said:

IRS code specifically refers to bank accounts with $10,000 at any time during the year. That have the info. One can only hope they are looking for big fish, and not harassment of the little guys.

IF you trust them.

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Clarification: It is when the total of all foreign accounts are over $10,000 that you have to fill out an FBAR form.

https://www.fincen.gov/report-foreign-bank-and-financial-accounts

Who Must File the FBAR?

A United States person that has a financial interest in or signature authority over foreign financial accounts must file an FBAR if the aggregate value of the foreign financial accounts exceeds $10,000 at any time during the calendar year. The full line item instructions are located at FBAR Line Item Instructions.

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