AirB&B Regulation in the DR

What do you a think should happen to AirB&B's in the Dominican Republic?

  • I hope AirB&B is eliminated as they did in NYC.

  • I hope they put in effect strong regulations on AirB&B.

  • I hope they put in effect some regulations on AirB&B.

  • I hope they leave AirB&B with no regulation.


Results are only viewable after voting.

JD Jones

Moderator:North Coast,Santo Domingo,SW Coast,Covid
Jan 7, 2016
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No it's not similar to Uber. Uber in DR is a franchise owned by Venezuelans. In DR the president himself is very heavily invested in hotels, as are all the most powerful families in one way or another. The only time that the government got involved to stop the war between Uber and the taxis was when it started to affect tourism because people were posting videos.

Also, notice that even the Chinese ferreterias now have to provide comprobantes fiscal. Even a little colmado is paying ITBIS. I am absolutely amazed that it has taken up until now for the government to start taxing vacation rentals, but it is definitely definitely going to happen. And I have to say that of all the government departments, MITUR is in my opinion the slickest, certainly when it comes to licensing.

I believe they've still got the most modern state-of-the-art tax-collection computer system in the world. They will only get better in collections as they learn how to use it.
 

XQT

Well-known member
Dec 7, 2022
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Puerto Plata
Any buyer in a strata common property of condos or detached houses better think twice.
Purchase and maintenance based on foreign buyers in USD.

If the condos or houses can be rented short term by AB&B's and VRBO's consider if you want to invest and live there.
You will have zero control of who lives there and who shares your property.
Having short term rentals to party people and sex tourists is a scourge.

Investors want to make money on rentals, often do not want to pay increased HOMA fees to maintain the property.
The owners carry the costs so investors can make money.

I prefer to live with owners, or to have a one year minimum rental.
Many short term renters illegals, rent without registering.
In the developed world strata councils are imposing daily fines of $1,000 or more to stop illegal rentals.

In the DR one of course has to be knowledgeable of existing laws and how they are imposed
And how much you would pay for litigation and your chances of success.

As seen in the P.C. thread many buildings, with buyers hopes of renting also short term, to cover operating costs if they are part time in their property.

Buyers beware, especially in the DR with fluid laws, judiciary and legal interpretation.

Foreigners are often discriminated against in the DR.
You want to legally challenge good luck and keep on paying lawyers and corrupt judges.
Many documented cases available.
 

aarhus

Swimming
Jun 10, 2008
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It appears this 2024 is when the Dominican government will start to impose regulations on AirB&B. In FITUR 2024 in Spain, David Collado said that a new agreement already exist and is currently being studied by ASONAHORES to either agree or disagree. The proposed agreement is proposing new taxes to be imposed on AirB&B's in the Dominican Republic, currently are tax free. Most likely the new taxes will be passed to the customer of AirB&B's, so expect an increase of the prices of Dominican AirB&B's.

There are other types of regulations for AirB&B's currently not contemplated but could be in the near future, such as hotels are subjected to a particular standard and are randomly checked to make sure they comply with certain sanitary regulations while AirB&B's are not subject to any of that. Hotels sre the most pressing group asking for new regulations are imposed on AirB&B's citing they create an unfair competition with them.

Currently, there are around 99,000 AirB&B's in the Dominican Republic, already equivalent to more than half of hotel rooms available in the country.

---

I doubt the DR will go the extreme route as has been done in NYC where AirB&B's are now banned. They simply ignored putting more regulation and simply put them all out of business. Ouch!
Anything with the DGII involved with their system and regulations will be a bureaucratic mess.
 
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NALs

Economist by Profession
Jan 20, 2003
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you are not billed in the dr if you make your reservation online. The Resort bills the Administration with itbis but at a much lower amount. For example; you book a room for 300$ / Night. The resort bills the administration to host you arround 100$. Itbis is paid only for the 100$. Also this allows the resort to "adjust" the "Hosting Costs" so they never will make any taxable profit. This is no "Dominican Practice". All the Resorts are doing the same all over the world (exept cuba).
Only if you make a reservation by phone and than pay at the resort in cash or with CC, than the entire amount will be taxed with ITBIS and you can receive a Invoice with Comprobante Fiscal.
Most resorts in Bávaro/Punta Cana have never made a profit on paper, but many are still owned and managed by the same hotel companies. :unsure:

Running a business for a long time that doesn't make a profit is actually sonewhat common, but eventually a profit is made. This is common when it's a new business, particularly a new business concept. This is no longer the case in Bávaro/Punta Cana where now you can build a resort and the place reaches a 70% or above occupation in a very short time.

Many people thought something was up when it hit the news. It couldn't be most resorts were not making money and yet, remain open for years and even get maintenance upgrades every X amount of time.
 
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aarhus

Swimming
Jun 10, 2008
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To make a long story short ; Only idiots pay taxes
I ended up feeling that way in the DR. Trying to invoice clients always with a Comprobante Fiscal. And then in real estate you have the ones who just use you to get market information. Oh we will list the property with you eventually.
 

aarhus

Swimming
Jun 10, 2008
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I believe they've still got the most modern state-of-the-art tax-collection computer system in the world. They will only get better in collections as they learn how to use it.
Are you saying they haven’t learned how to use their system? I can believe that.
 

Manuel01

Well-known member
Apr 1, 2009
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I ended up feeling that way in the DR. Trying to invoice clients always with a Comprobante Fiscal. And then in real estate you have the ones who just use you to get market information. Oh we will list the property with you eventually.
a humble advise; never ever issue a "comprobante fiscal" if it is not requested unless you are listed as a tax offender.
 
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aarhus

Swimming
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a humble advise; never ever issue a "comprobante fiscal" if it is not requested unless you are listed as a tax offender.
I really don’t know if that is true. In my experience with real estate it often suited the corporate type clients with commercial leases and that’s why we liked that. And I am assuming that is more common in the capital. In residential real estate it’s completely different. But you can’t have a company in the DR without any income and you are going to have some expenses where you are receiving a “comprobante fiscal” paying Itbis. You report that as expenses.
 
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USA DOC

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Feb 20, 2016
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you are not billed in the dr if you make your reservation online. The Resort bills the Administration with itbis but at a much lower amount. For example; you book a room for 300$ / Night. The resort bills the administration to host you arround 100$. Itbis is paid only for the 100$. Also this allows the resort to "adjust" the "Hosting Costs" so they never will make any taxable profit. This is no "Dominican Practice". All the Resorts are doing the same all over the world (exept cuba).
Only if you make a reservation by phone and than pay at the resort in cash or with CC, than the entire amount will be taxed with ITBIS and you can receive a Invoice with Comprobante Fiscal.
If you go to your favorite hotel in Sosua, where you know the owner... and you always pay cash they put the money in their pocket, and you pay about 20% less.. and of course you were never there.........
 

MariaRubia

Well-known member
Jun 25, 2019
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I don't think that is true. Many people (including me) have a company which does nothing else but own property, and has no income.

Correct, it's fine to have a dormant company (they call it a fantasma ). But you do need to complete the relevant monthly returns to DGII even if it is dormant.
 

aarhus

Swimming
Jun 10, 2008
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Correct, it's fine to have a dormant company (they call it a fantasma ). But you do need to complete the relevant monthly returns to DGII even if it is dormant.
I was just about to comment on that. I guess you can hold assets and have no operations. But I would have thought you didn’t need to report monthly Itbis to the dgii then. In my example above I just meant it’s problematic if you don’t invoice anybody with a Comprobante Fiscal but have expenses you report.
 

JD Jones

Moderator:North Coast,Santo Domingo,SW Coast,Covid
Jan 7, 2016
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Are you saying they haven’t learned how to use their system? I can believe that.
Have you ever used ORACLE?

These systems all have modules that can be implemented in stages. The more modules they use, the more efficient they get.

By the way, the DGA has just implemented a new version of the Microsoft software they use for customs. Microsoft Dynamics 365 is the newest version they've implemented:

Santo Domingo.- The General Directorate of Customs (DGA) has significantly reduced the time it takes to complete internal administrative processes through the implementation of Microsoft Dynamics 365 management software. This translates into greater traceability and agility in the services received by taxpayers.

Previously, the system used was Microsoft Dynamics SL, with which supplier invoice records in accounts payable took 15 minutes to process. With Dynamics 365, this is now done in 5 minutes, representing a 66.67% improvement.

Likewise, monthly closing processes and financial statement preparation went from 21 days to 5 days, for a 76.19% improvement.

Similarly, bank reconciliations for the 11 banks went from 7 hours to 2 hours, for a 71.43% improvement.

“The General Directorate of Customs is a service institution, and it is committed to its taxpayers. Therefore, we will implement all possible tools to improve them. That is why we have included Microsoft Dynamics 365 in the Integrated Customs Management System (SIGA), which has contributed to raising the quality and reliability of internal Customs information,” said Eduardo Sanz Lovatón, Director General of Customs, when announcing the information.

He assured that the implementation of this software has been a great support for the 24-Hour Clearance program since it allows the status of each taxpayer’s case to be viewed in real-time.

The areas that benefit from this software include the Administrative, Financial, Process, Large Taxpayers, and Human Resources departments, as well as the Technology Sub-Directorate, and the Purchasing and Procurement and Maintenance and Transportation departments.

In addition, this software also provides the institution with a dashboard that provides critical information and more robust financial performance.

The investment in this system, implemented in April 2023, is part of the DGA’s commitment to technology for the improvement, transparency, and security of the services it offers.

Since Eduardo Sanz Lovatón took over as head of the DGA in August 2020, the use of technology and the improvement of services have been fundamental pillars.

 
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CristoRey

Welcome To Wonderland
Apr 1, 2014
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Many short term renters illegals, rent without registering.
In the developed world strata councils are imposing daily fines of $1,000 or more to stop illegal rentals.
I agree with your post, especially how the laws are interpreted, enforced and who they tend to favor however I've never heard of the above happening anywhere.
Are you talking about AirBnB's specifically?
 

JD Jones

Moderator:North Coast,Santo Domingo,SW Coast,Covid
Jan 7, 2016
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I agree with your post, especially how the laws are interpreted, enforced and who they tend to favor however I've never heard of the above happening anywhere.
Are you talking about AirBnB's specifically?
I mentioned that the other day. On just about any FB North Coast group you can find dozens and dozens of ads for daily, weekly, and month rentals.
That's the reason I unsubscribed from all of them. One ad after another.
 

CristoRey

Welcome To Wonderland
Apr 1, 2014
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I mentioned that the other day. On just about any FB North Coast group you can find dozens and dozens of ads for daily, weekly, and month rentals.
That's the reason I unsubscribed from all of them. One ad after another.
AirBnB rentals need to be held to the same standards as hotels when it comes to licenses, registrations, taxes and fees with zero exceptions.
Uber vs. Taxi's same as well.
 

windeguy

Platinum
Jul 10, 2004
41,986
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AirBnB rentals need to be held to the same standards as hotels when it comes to licenses, registrations, taxes and fees with zero exceptions.
Uber vs. Taxi's same as well.
I disagree. Airbnb's are not the same as a hotel room. Airbnb's run the gamut from having someone rent a spot on your sleeper sofa, having one bedroom in a house or condo, a complete condo/apartment, a complete home, a tent in the backyard, etc, etc, etc.

How can the same standards apply to that as they are applied to Hotel Rooms? They cannot.
They can be taxed at the source, unlike hotel rooms which is not the same at all, and therein lies a source of revenue.

We all have seen how the hotels avoid paying taxes by accepting cash, or making bookings outside the DR and misreporting the amounts.
And all those ads on FB for apartments are going to be regulated and taxed? That would be a dream for the revenuers.


So, let's just keep Airbnb as it was. I know I am not going to change what will happen, but that is what I want.
 
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