When is house rent sujected to ITBIS? When is it exempted? Is the time length of the rental contract important for this ? Quid with furnished rent of a private house owned by a non resident? Partial subjected to ITBIS or not ?What when this rent is occasional ? What with ITBIS deduction on the purchase of furniture for the equipment that is rented with? Subject to monthly declarations? Can anyone help me sort this out ? What is fair practice ?
- Thread starter peet
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House rent subjected to ITBIS?
bunch of Q's in a few words.
i try to give you some ideas, my own beach front where i live is a rental, too.
i pay my rent every 11th of the month,
and i get from the admin of the property a receipt with his company's RNC and more important, with an NFC number on the bill(a so called 'comprobante fiscal'), so i can use my monthly payments for the house "deductable" of my own business's incomes.
i rented the property in the name of my business of course.
it is the same for purchasing furnitures, televisions, gas for the car aso for your house/office aso, you do it in the name of your legalized and registered tax paying company, you ask for your bill valid as "comprobante fiscal" and you can put that in your monthly Tax payment bill.
just in case that you are not a company,
do you pay taxes?
bring up more details, so we will try to answer,
and here on this bord you will find the answer.
Mike
i try to give you some ideas, my own beach front where i live is a rental, too.
i pay my rent every 11th of the month,
and i get from the admin of the property a receipt with his company's RNC and more important, with an NFC number on the bill(a so called 'comprobante fiscal'), so i can use my monthly payments for the house "deductable" of my own business's incomes.
i rented the property in the name of my business of course.
it is the same for purchasing furnitures, televisions, gas for the car aso for your house/office aso, you do it in the name of your legalized and registered tax paying company, you ask for your bill valid as "comprobante fiscal" and you can put that in your monthly Tax payment bill.
just in case that you are not a company,
do you pay taxes?
bring up more details, so we will try to answer,
and here on this bord you will find the answer.
Mike
A private owner of a house rents his house to another private person. Does the owner has to pay Itbis on the rent he gets from his tenant? When he does he, has he to make monthly ITBIS declarations I suppose ? Does it matter it are short or long rentals and /or the house is furnished or not?
I come to this question because a property manager told me that he has to deduct 16 % Itbis on the rent for which he is intermediating. This was a surprise to me! I am from Europe and here the rent is exempted from VAT when the owner is a private person and not acting as a regular business. Only the commission that the agency gets is subject to VAT and charged by the agency to the owner.
I have been looking in the Dominican Itbis regulations www.dgii.gov.do/asistencia/Preguntas/Paginas/PreguntasFrecuentes.aspx and found that "?Qu? est? exento del ITBIS?" Servicios de: Alquiler de viviendas"
In the same ITBIS law you can find as "agravado" "the renting of condos and villas and hotel services".
I think the Itbis application depends on the circumstances. When it is a rental by a pro together with other additional services as a whole, it can be subjected to Itbis. When it is a rental of a regular house whitout extra services it can be exempted.
Perhaps this makes the whole thing more clear?
I am asking this question because the ITBIS is a expensive tax with high fines and intrests when you do not comply with it correctly!
Thank You!
I come to this question because a property manager told me that he has to deduct 16 % Itbis on the rent for which he is intermediating. This was a surprise to me! I am from Europe and here the rent is exempted from VAT when the owner is a private person and not acting as a regular business. Only the commission that the agency gets is subject to VAT and charged by the agency to the owner.
I have been looking in the Dominican Itbis regulations www.dgii.gov.do/asistencia/Preguntas/Paginas/PreguntasFrecuentes.aspx and found that "?Qu? est? exento del ITBIS?" Servicios de: Alquiler de viviendas"
In the same ITBIS law you can find as "agravado" "the renting of condos and villas and hotel services".
I think the Itbis application depends on the circumstances. When it is a rental by a pro together with other additional services as a whole, it can be subjected to Itbis. When it is a rental of a regular house whitout extra services it can be exempted.
Perhaps this makes the whole thing more clear?
I am asking this question because the ITBIS is a expensive tax with high fines and intrests when you do not comply with it correctly!
Thank You!
i would say we need our bordlawyer Sr Guzman who sure will join in with his knowledge when he finds the time.
i never thought about such private incomes/rentals in case of Taxes.
and in my own case many different services are included in the rent,
like gardening, daily trash collecting from the homedoor, maintenance in and out of the house, day and nightshift security men, cable TV connection aso.
so mine i can not compare to your situation.
let's see what the Lawyer/Law says to such.
cheers
Mike
i never thought about such private incomes/rentals in case of Taxes.
and in my own case many different services are included in the rent,
like gardening, daily trash collecting from the homedoor, maintenance in and out of the house, day and nightshift security men, cable TV connection aso.
so mine i can not compare to your situation.
let's see what the Lawyer/Law says to such.
cheers
Mike
Attention Renters
Be careful with this one when sign leases though-- my landlady had me sign a lease which had me (as the tenant) responsable for all the taxes (Sr. Guzman- what taxes would those have been?) ..
Now my Spanish is not perfect but I knew enough to spot that one.. I said I would not sign that and lo and behold, they came out with another lease inside of 5 minutes.....
Be careful with this one when sign leases though-- my landlady had me sign a lease which had me (as the tenant) responsable for all the taxes (Sr. Guzman- what taxes would those have been?) ..
Now my Spanish is not perfect but I knew enough to spot that one.. I said I would not sign that and lo and behold, they came out with another lease inside of 5 minutes.....
We all certainly respect your opinion and expertise, but the Ministry of Tourism has a completely different interpretation of that. They feel a regular residential rental, from one individual to another individual, in anything larger than a chicken coop is under their jurisdiction. Do you have any knowledge of this or was I misinformed?
What Fabio J. Guzman told you here is correct, you don't have to pay ITBIS on your Residential Rentals (alquiler de viviendas). He even quote the tax code that exempt the ITBIS payment, so i guess somebody is ripping you off. As any Dominican friend that you have "if any" and he/she will tell you the same thing. (Dominican here).
Don't confuse ITBIS with withholding. For example, certain taxpayers must retain 10% of any rental payments they make and pay directly to Internal Revenue (Art. 309 of the Tax Code).
As for residential rentals, Art. 344 of the Tax Code lists the exempted services ("servicios exentos"); the 7th item listed is "Servicios de alquiler de viviendas".
Now, reading your post, it may be that what you are renting is not a "vivienda" (a home or place where a person lives) but a "hotel room" or "room"" of a "pension", or a condo unit rented for tourist purposes. Those items ARE NOT exempted from the ITBIS.
As for residential rentals, Art. 344 of the Tax Code lists the exempted services ("servicios exentos"); the 7th item listed is "Servicios de alquiler de viviendas".
Now, reading your post, it may be that what you are renting is not a "vivienda" (a home or place where a person lives) but a "hotel room" or "room"" of a "pension", or a condo unit rented for tourist purposes. Those items ARE NOT exempted from the ITBIS.
I agree with Mr Guzman, but when becomes the vivienda a tourist house? Depends it from the house itself, furnished or not, the kind of renter, the short or long rental, where is the limit? To be exempted must the renter have a Dominican cedula or what. Also a tourist non resident can rent a vivienda for two months and do his own catering or a Dominican can rent and move out after two months. It is not clear to me.
Peet
Peet
The word vivienda is a spin off from the verb vivir (to live). It's difficult to translate vivienda into English directly but I would call it a "home" which would re-translate correctly into hogar, which in Spain at least is a legal term just like "home" in the US. El hogar, could be protected legally.
Abviously a leasure or vacation "home" is not a home (not homestead). This may in this country too have legal ramifications as to the protection from (eg
police searches etc. (?)I don't think the length of the stay can really be THE determinating factor to sort vacation and leasure rents from residential rents here, as in this country's frail economy local's can see themselves forced to be "on the move" quite often. (?)
All the above are rather questions than statements, btw.
... J-D.
yes JD,
and in specific cases it can be hard to draw the line between a vivienda and a non-vivienda rental.
i basically understand those phrases and their exceptions that it does not depend on long or short term rentals.
the owner have to declare what kind of rental he offers.
if he declares his property/house/appartment aso as a vivienda he is just obliged to the 10% vivienda rental tax but not allowed to rent the same appartment/house/room to a ?visitor?, which i would say from my understanding of those phrases would be somebody non-local/non-dominican/non-resident. if he would that would violate that law and he could be fined.
a vivienda is a rental of somebody to live there, not while on a visit to the country, to live means to live and work in the area where the room/house aso is located. such can be short-mid-or long term.
like JD wrote,
to it is usual for many dominicans to move from one spot to an other quiet often.
but that?s just my understanding/interpretation of the ?words?,
i am no lawyer or pro on laws.
Mike
and in specific cases it can be hard to draw the line between a vivienda and a non-vivienda rental.
i basically understand those phrases and their exceptions that it does not depend on long or short term rentals.
the owner have to declare what kind of rental he offers.
if he declares his property/house/appartment aso as a vivienda he is just obliged to the 10% vivienda rental tax but not allowed to rent the same appartment/house/room to a ?visitor?, which i would say from my understanding of those phrases would be somebody non-local/non-dominican/non-resident. if he would that would violate that law and he could be fined.
a vivienda is a rental of somebody to live there, not while on a visit to the country, to live means to live and work in the area where the room/house aso is located. such can be short-mid-or long term.
like JD wrote,
to it is usual for many dominicans to move from one spot to an other quiet often.
but that?s just my understanding/interpretation of the ?words?,
i am no lawyer or pro on laws.
Mike