Worldwide Tax Summaries--DOMINICAN REPUBLIC(1999-2000)(part1)

Worldwide Tax Summaries--DOMINICAN REPUBLIC(1999-2000)(part1)

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CORPORATE TAXES
GENERAL NOTE
The information in this entry is current a of Janurary 1998. For subsequent developments consult the contact listed above.
TAXES ON CORPORATE INCOME
The Dominican Tax Code provides for a 25% corporate tax rate.
CORPORTE RESIDENCE
A company is resident when it is incorporated in the Dominican Republic and when its central management and control are exercised in the country.
However, a company not incorporated in the Dominican Republic is subject to tax when it has a permanent establishment in the Dominican Republic.
OTHER TAXES
Internal and consumption taxes collected at Customs upon importation/These taxes are assessed at various rates in addition to customhouse duties.
Selective consumption tax/The selective consumption tax ranges from 5% to 80% and is applied on the consumption of domestic manufactures (alcohol products and cigars), on imported goods that are considered to be nonessential and on certain types of services, such as insurance, international air transportation, long-distance telephone calls, and hotel rooms.
Value-added tax/VAT is applied to industrialized goods and certain services, such as hotels, motels, cables, telexes, cable television,radio, pagers, flower shops, bars, restaurants, boites, rental cars, and rental equipment. The rate is 8%. A zero rate applies to exports.
Exemptions include living essential and goods already subject to similar taxes.
Real estate transfer tax/This tax is assessed at a basic rate of 4% (4.48% overall, including 12% surcharge).
Stamp taxes/Stamp taxes are imposed on most government-related documents.
BRANCH INCOME
Branch profits are taxed at the same rates as corporate profits. There is no withholding tax on branch profit remittances to the home office.
INCOME DETERMINATION
Inventory valuation/LIFO is the method of inventory valuation accepted for fiscal purposes. Exceptionally, other methods may be authorized upon request.
Conformity between book and tax reporting is not required.
Cqpital gains/Capital gains are taxable. Ordinary (taxable) income embraces the sale of assets used in the conduct of a business.
Intercompany dividends/Dividends are tax exempt. There is a 25%
withholding imposed on cash dividends that serves as an advance tax payment or as a credit against future tax payable for the company distributing the dividends.
Foreign income/Dominican resident companies are subject to taxation on income from Dominican sources and on foreign dividends and interest.
Stock dividends/Stock dividends are not subject to taxation.
DEDUCTIONS
Depreciation and depletion/DepreCIAtion allowances on fixed assets are determined by the diminishing-balance method at the following rates.
    CLASS                                      
                                                      %
    Buildings…………………………                  5
    Furniture, fixtures, computers, vehicles, ect. ……       25
    Other assets not specified…………………………              15

Depletion of mines is based on units produced.

Net operating losses/Losses may be carried forward for a maximum of three tax periods.
Payments to foreign affiliates/Payments to foreign affiliates for royalties, interest or service fees are deductible, subject to 25% withholding tax rate.
Taxes/Except for tax on income, inheritances and donations and
compensation-in-kind, all taxes are deductible.
Other significant items/For tax purposes the following significant items should be considered.
1.Bad debts are deductible only in the year the loss is suffered.
Authorization may be obtained to follow an alternate method allowing deduction only in the year charges qualify as doubtful, up to 4% of the balance of the accounts receivable at year-end.
2.Amortization of intangible assets, such as patents, author's rights,drawings, franchises, and contracts without set expiration date, is not deductible.
3.Changes in method are not allowed without advance approval.
4.Bonuses to employees are deductible within the year if paid between 90 and 120 days after year-end.
GROUP TAXATION
Group taxation is not permitted.
TAX INCENTIVES
The Tax Code revokes all tax incentive laws (except those for offshore, i.e., free-zone, operations for export). Qualified projects under Tourism,Forestry, Energy, Agroindustrial, and Industrial Free Zone Operations Laws will continue to enjoy tax benefits for the period granted, in accordance with the approved Resolution.
WITHHOLDING TAXES
Dividends in cash to resident and nonresident individuals and corporations are subject to a withholding tax of 25%.
On payments to foreign corporations that are not permanently established in the Domincan Republic and to nonresident individuals the withholding tax is as follows.
                                                        INTEREST        ROYALTIES    TECHNICAL
                                        
                             ASSISTANCE
                                             
                 %            %            %
    Nontreaty, basic………25(Note)        25            25
    Treaty (Canada) ………18        18            18

Note:
    Payments on interest (loans) to foreign finanCIAl institutions are
subject to a withholding tax of 15%.

TAX ADMINISTRATION
Returns/The company's tax return must be filed and tax paid within 120
days from the closing of the tax period.

Tax returns are the self-assessment type and must be filed on forms supplied by the Income Tax Department.

Payment of tax/The balance of any tax due must be paid no later than the due date for filing the return. Three advance payments based on the income tax of the preceding year are required:the first 50% in the sixth month, the next 30% in the ninth month and the final 20% in the twelfth month of the tax year.
CORPORATION TAX CALCULATION
Year ending December 31,1997
Pretax income……………………………………………………    RD$1,000,000
Add-Nondeductible expenses:
    Charitable contribution in excess of limitation 25,000
    Tax on compensation-in-kind(120,000@25%)………  30,000    55,000
                                        
                                    1,055,000
Deduct:
    Dividends from domestic operation……………………50,000
    Carryover loss……………………………………………100,000    150,000
Taxable income……………………………………………………    RD$ 905,000
Tax at 25%……………………………………………………    RD$ 226,500

Note:
Exchange rate of the peso at December 31,1998:US$1=RD$15.85    来源:CFTInet, Beijing      

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北京中立诚会计师事务所简介下载
地 址:北京朝阳区北苑路13号领地OFFICE大厦B座7层701室
电 话:(010)- 52086638 51095615
传 真:(010)- 52086636
邮 编:100107
E-mail:supercpa@163.com