Real Estate Property Release Tax Norm 08-2014

 By Maria Arthur (marthur@aclaw.com)

On December 22nd of 2014, the Dominican Tax Administration (TA), published DR Tax Ruling 08-2014 regarding the Sale of Real Estate Property and which provides for the Release of the Same from the seller’s information registered at the TA’s registration system.

Individuals and legal entities that sale a real estate property before or after the publication of said Tax Ruling must file a release request before the TA no later than six (6) months after the sale’s contract. Otherwise, such seller shall be subject to the application of penalties of five minimum wages, regardless of any other penalty applicable according to the Tax Code.

At Arthur & Castillo we can assist all individuals or legal entities which have sold or sale one or several real estate assets, whether they are resident or nonresidents of the Dominican Republic, with the compliance of the above TA’s requirement.

On the other hand, Article 6 of said Tax Revenue Ruling provides that “in the event of a capital gains tax assessment derived from the transfer of the real estate property, the payment shall be made, as provided, and in a timely matter”. In case that you are planning to sale one or several real estate properties, at Arthur & Castillo we have tax experts that may provide you with tax planning services.

Among the reasons that motivated the issuance of this Tax Ruling are (i) trying to avoid the deferral of the real estate property transfer tax by the purchaser of the same (ii) having more control over the potential capital gains tax derived from the sale of real estate property; and (iii) the damaged suffered by tax payers who, after selling their real estate property, continue to be “subject” to the payment of the Real Estate Property Tax and to the Real Estate Assets Tax, without them being the effective tax payer.

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