Is the Dominican Republic a Tax Heaven?
Although the Dominican Republic is not considered a tax haven, it has a territorial tax system, which means you can live there tax free as long as your income comes from abroad (this also applies to businesses). Foreigners must pay the tax over their Dominican sourced income, and starting from their third residency year in the country they must pay over their income from foreign sources.
Taxpayers resident in the Dominican Republic that carry out commercial or financial operations with residents of these states or territories will only be subject to transfer pricing obligations where the operations are with related parties. However, the DGII may partially consider a state and territory if it maintains a specific preferential or low/no tax regime, in which case a specific notice will be issued by The CONFOTUR law 158-01 Law for the Promotion of Tourism Development in order to promote the tourism development in Dominican Republic.
If you are you would like to buy a second-home or vacation property in the Dominican Republic and it is located in the mountains, beach or it is a tourist infrastructure such as a golf course, resort properties, etc covered by the CONFOTUR law, you saving yourself of 3% Transfer Tax of the purchase value and 1% IPI Property Tax of the exceeding value of RD$8,138,353.26 of the complete patrimony of each taxpayer and it’s paid on a yearly basis. Properties and tourism developments under CONFOTUR are exempt of this 1% property tax for up to 10-15 years up to 15 years. You will receive incentives and benefits for your best investments and finances.
Most of tourism properties comes with a 15-year exemption from all taxes, including income tax and the possibility of acquiring non-taxable real estate in Dominican Republic exclusive for:
Investor working on investment projects.
Companies and individuals dedicated to tax optimization in on shore areas.
Companies and individuals who acquire real estate for investment purposes with tax exemption.
Types of properties are the Dominican state interested in and applicable to CONFOTUR Law:
Hotel facilities, resorts and / or hotel complex
Construction of facilities for conventions, fairs, international conferences, festivals, shows and concerts.
Companies dedicated to promoting cruise activities that establish, as the mother port for the origin and final destination of their vessels, any of the ports specified in this law.
Construction and operation of amusement parks and / or ecological parks and / or theme parks.
Construction and / or operation of port and maritime infrastructures at the service of tourism, such as marinas and marinas.
Construction and / or operation of tourist infrastructures, such as aquariums, restaurants, golf courses, sports facilities and any other that can be classified as establishment belonging to tourist activities.
Small and medium-sized companies whose market is mainly based on tourism (handicrafts, ornamental plants, tropical fish, breeding farms for small endemic reptiles and others of a similar nature). Basic service infrastructure companies for the tourism industry, such as aqueducts, treatment plants, environmental sanitation, garbage collection and solid waste.
Are you looking for your dream home away from rutine, cold weather o investment in the Dominican Republic? Discover our unique paradise living experience. Find out more about our CONFOTUR properties.
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