Determining the taxes on a new building and what can you deduct to offset taxes

bob saunders

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Jan 1, 2002
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In the DR if you have a business and you build a NEW building can you claim as deductions the costs of the plans and building materials against the taxes you need to pay on the value of the building, and who determines the value of the building. For example (not real figures) say the plans cost 200,000 pesos and the building cost 10,000,000 pesos to build, can 10,200,000 pesos be deducted over a period of years, or what?
 

Fabio J. Guzman

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Jan 1, 2002
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Your are mixing up income tax and tax on assets.

For income tax purposes, you can certainly deduct depreciation.

Tax on assets is 1% of the company assets. No deductions allowed.

Finally (and this might confuse everybody), if the income tax you pay is equal or higher to the amount of 1% of your assets, there is no need to pay the tax on assets.
 

bob saunders

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Jan 1, 2002
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Your are mixing up income tax and tax on assets.

For income tax purposes, you can certainly deduct depreciation.

Tax on assets is 1% of the company assets. No deductions allowed.

Finally (and this might confuse everybody), if the income tax you pay is equal or higher to the amount of 1% of your assets, there is no need to pay the tax on assets.

But if this is a personal business (not incorporated) do the same rules apply? You are correct you have confused me with the last statement. Does this mean if your income tax was less than 1% you would have to pay the 1% on your assets plus your income tax? Thank you in advance for your answer.
 

Fabio J. Guzman

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Jan 1, 2002
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The 1% tax on assets only applies to corporations, not to individuals.

As an individual doing business you can deduct any expense needed for your business (Art. 287 of the Tax Code).