Taxes

Tax on real estate property, sumptuary housing and not built urban lots (IVSS)
This it is the tax that is applied to the commercial premises, sumptuary housing (houses or apartments) and lots located in urban zones that have not been built, whose estimate value is greater than five million pesos (RD$ 5, 000,000.00) [law 18-88].
These houses, lots and premises are taxed with 1% applied on the value of each building that exceeds to the five million pesos (RD$ 5.000.000,00).
Premises, houses and urban lots whose value is inferior to this amount are exempted from this tax.
Also, they are exempted from this tax the constructions and lots belonging to the Dominican State, beneficial institutions, religious organizations and Diplomatic legations. In addition the buildings whose proprietor is over sixty and five (65) years of age, provided the property has never been transferred and the owner does not have another building registered to his name.
Income tax
Based on a sliding scale whose top is currently at 30% but it is going to be gradually lowered during the next four years down to 25%
Value Added Tax
The ITBIS, local equivalent to the Value Added Tax of many other countries, taxes goods and services and currently is calculated at the rate of 16%
Company tax
Recently raised to 30%, it will be gradually lowered, in parallel with the income tax, down to 25% during the next years.
Interests on bank accounts
These are tax free at this moment, both for residents and non residents. However this might change in the future, as there are ongoing discussions about this subject in the Parliament.
Purchasing a property
At the present time real estate operations are regulated by the real estate registry law of 2005 that intends to regulate and adjust all the property rights, as well as the liens and other charges to the property.
The title certificate constitutes the document par excellence to prove the right of property from the seller to the buyer.
In a transaction, the following things are required:
1.- Seller and buyer must appear before a Notary to subscribe a transaction contract that will contain the legal description of the building to be sold, the sale price and any other condition of the sale.
2.- The transaction contract will have to be presented to the local branch of the Internal Revenue Service, in order to pay the transfer taxes that consist of 4,4% of the market value of the building, distributed in the following way:
a) 3% as tax on real estate transfer (Law 288-04)
b) 1,3% of taxes on documents (Law 835-45). More precisely: RD $232 for the first RD $20,000 and RD $13,000 for the rest.
c) Minor expenses by diverse concepts: stamps, check certification, taxes on checks, gratuities etc.
It should be emphasized that taxes are calculated on the market value of the transferred building (Art. 288-04) as assessed by an appraisal conducted by governmental authorities and not on the price stipulated in the price of transaction.