The TAX SYSTEM in Rep. Dom.
advantageous tax system...
REAL ESTATE PROPERTIES SALE.
Nowadays, no restrictive clause exists for the foreigners for the purchase of a real estate property in Dominican Republic. Before, the decree N° 2543 of 1945 and its modifications required a foreign person to the country to obtain first an authorization of the Executive Authority, in the most of the cases.
This law was derogated by the decree N° 21-98 of January 8th, 1998. The payment of an impost and tax vary between 3.5 and 4.5% of the purchase price, is compulsory for the registration of a purchase of a real estate property (this tax is payable just once: it’s called transfer tax).
THE REAL ESTATE PROPERTIES AND THE INHERITANCE TAX.
The foreigners can inherit freely of a Real Estate property in Dominican Republic, nevertheless if they are not resident of the country, the inheritance tax can be increased by 50%.
In order to avoid the implementation of the Dominican law on the inheritance, it’s recommended to the foreigners to purchase real estate properties trough a society, so these property laws would not be applied on the real estate property, yet prone to the Dominican law, but on the society stocks, then owner of the buildings, with a more flexible tax system.
With more than 8 millions of inhabitants, and a young and dynamic government, the Dominican Republic launched many political, economical and social reform that enable it to open to the exterior markets.
The Dominican Republic is signatory and beneficiates from many agreements and conventions as the Lomé IV Convention and the Caribbean Basin Initiative (C.B.I) and is observer of the CARICOM.