The CONFOTUR LAW and its benefits

When looking in Punta Cana at New Villas or condos there is a law that applies...the CONFOTUR Law No.158-01 which is "Promotion of Tourism". The law is aimed at projects in tourist real estate destinations in order to encourage tourism in the area. The law saves the buyer the 3% Transfer Tax (3% of value of property) and if spending over approx $148,000US it saves you the 1% property tax for period of 15 years, under $148,000US (approx) property is tax exempt.  My question is why don't I see this incentive listed in any new construction communitee listings when looking at the North Coast real estate?

Hi Kat,

Wow!!! Good to know. I will investigate further with my lawyer....

Each individual developer or construction company needs to apply for this tax exemption. The exemption only applies to the first buyer of the property. In several instances I've observed that even though the buyers who benefit from this law save in taxes these properties tend to be more expensive than those that do not have the tax exemption.

The law only applies to designated tourism zones, which seem to be :

1- Jarabacoa y Constanza
2- Barahona, Baoruco,Independencia y Pedernales
3- Montecristi, Dajabón, Santiago Rodríguez y Valverde
4- SanCristóbal y elmunicipio de Palenque; la provincia Peravia y la provincia Azua de  Compostela.
5- La provincia María Trinidad Sánchez y todos sus municipios
6- Polo Turístico de la provincia de Samaná
7- La provincia de Hato Mayor  y sus municipios ; la provincia de El Seybo y sus municipios ; la provincia de San Pedro de Macorís y susmunicipios ; la provincia Espaillat y los municipios : Gaspar Hernández , Higüerito , José Contreras , Villa Trina y Jamao al Norte ; Jamaoal Norte ; las provincias Sánchez Ramírez y Monseñor Nouel ; laprovincia MontePlata ; en la provincia de La Vega , el municipio de  Luperón , así como el Castillo y La Isabela Histórica, en la Provincia de Puerto Plata , y la Zona Colonial de Santo Domingo.
8- La Provincia de Santiago  y sus municipios.
9- El municipio de Las Lagunas de Nisibón , y las secciones de El Macao, Uvero Alto y Juanillo , de la Provincia de La Altagracia.  Modifiyed in 2002 with Ley No. 184-02 : other municipios of the Altagracia Province got other minor incentives

The idea is to promote investment in the regions that need it the most.
The North Coast tourist zone ( POP, Sosúa, Cabarete)  is not listed.

I think that might be the issue...the developers on North Coast are not applying for the exemption. But it was not my understanding that only the 1st buyer benefits from the exemption. The realtor Scott Medina from GoPuntacana.com (large realty company on east coast) has it on just about all new construction listings and it doesn't say anything about being just the 1st buyer in fact most places have already had several sales. As far as the price, there were quite a few that I looked at there that I am finding on North Coast in same price range.

You would think with the Marriott hotels coming in with huge project by 2021Cabarete and Sousa would be considered a tourism spot, they are going to start advertising as luxury vacation spot is what I read.

CONFOTUR is applicable to Puerto Plata Province.

I was involved with one such large renovation hospitality project 18 months ago.

Obtaining CONFOTUR does take time and a lot of documentation up front including significant design documentation. This actually lengthens the whole process for developers who see this benefit important in their cost planning. It is hard to get any taxes paid back retropspectively, so CONFOTUR needs to be in place before any offshore materials are bought.

So how do you know if your development is getting this but does not say so.

http://mitur.gob.do/configurar-transparencia/confotur/

2009 to end 2015 projects listed here.

There must be a list of approved projects since the end of 2015 but haven't found it online yet. You could always ring MITUR.

Cindyscruise.....I am not sure how to tell if the developer is not telling you, I don't think he would benefit from not telling because it promotes his new community. I don't know if a lawyer could dig deeper at closing to make sure 3% transfer fee gets waived if indeed it's supposed to. The 1% taxes over $148,000 purchase would not be a huge amount every year (compared to taxes in US) but $200-$400 per year  year for 15 years adds up! I will definitely be as long questions if I decide to purchase on my next visit of realtor, lawyer and developer:-)

There are several projects at the north coast with Confotur. In Las Terrenas. 100% sure.

The thing is, 15 years taxfree but ONLY for the first buyer. So when you want to sell the property after 1 year or 5 years, the new owner needs to pay the normal taxes.
The properties in confotur are always accessed at the full price so the new owner will pay full taxes.
So when you want to sell a property like that, often very difficult because everybody prefers to have a taxfree unit.

Probably better to buy without confotur.

Ok you mean the first person to buy the property, I thought the post from some one the other day meant the first person to buy one of the villas or condos. So that makes sense that you cannot pass it on when you sell. I don't think any of the places on the North Coast I want to look at offer it....but taxes are nothing compared to US so that's ok.

First purchaser of any unit honey.

We were told that developers or builders could only apply per property every 5 years.  Even though there is expansion planned for our community in Las Terrenas, it most likely will not take place for 5 years until they can apply for it again.  Perhaps this is the case where you are looking?  But I am not an expert by any means, just passing along what was explained to us by the project manager of our property.

Hi Kat, I believe the developer has to apply and then the tax exemption is only available for a certain period of time for the entire development, but they can also pass that on to whomever they sell the lots or units as long as these units were not sold to anyone else once completed in the project. That was the case when we bought our condo during construction at Residencias Costa Hermosa in the El Cortecito area of Punta Cana.
Because we ultimately do not want to live in a condo, we started looking for villas that we could afford and Sosua offered more of those at better values than we saw in Punta Cana either at PC Village, Cocotal, El Ejecutivo (too remote, not as many expats), or the new places near downtown PC (too small and too close together). So we just bought a lot in Sosua Ocean Village and will have the opportunity until 2024 to take title to the lot and not pay the transfer tax. The developer also mentioned that they may get an extension, but we are not counting on that.

Hi everyone! Does anyone know if the Confotur law also waves taxes on rental income for the first 15 years? Or does it only apply to property taxes for 15 years?
If i'm not mistaking: property taxes 0 for 15 years, 0 tax on income for 15 years and pay 0 on transfer 
Rental income is different.  My understanding is your are taxed on rental of the unit on a new basis
Thanks! I have been looking into this as I had been told by my attorney when I purchased the apt that there would be no rental income tax for the first 15 years after the constructions was completed, but now the property mgmt company is telling me they have to discount 27% for rental income taxes that are due to the state every year. If anyone is an attorney, accountant, developer or property manager and can confirm what the correct protocol is, I would be eternally grateful! I found the info below in the Confotur website...google translation at the bottom.


Queda excluido de impuestos sobre la renta sobre personas físicas o jurídicas que emprendan, promuevan o inviertan capitales en las actividades regulas por la ley, así como aquellas que desarrollen nuevos proyectos u ofertas complementarias, ya sea por concesión, arrendamiento y cualquier otra forma de acuerdos con el Estado Dominicano en los polos turísticos indicados en la ley y de conformidad con el Art. 3 de la misma.


Exempt from rental income tax on physical or legal persons who undertake, promote or invest capital in activities regulated by this law, as well as those who develop new projects or complementary offers, whether by concession, lease and any other form of agreements with the Dominican State in the tourist poles indicated in the law and in accordance with Article 3 of the same.
Well I hope your attorney is correct because if not, welcome to DR! 

@Kat11 Hi, my wife and I just did 5 days looking at properties in Punta Cana and my understanding is the law applies to 1st owner, now it gets interesting if you buy an 11 year old property in an establishment community from the original developed the law applies.  As for me when the time comes I will ask my attorney cause at the end of the day she will know more that what think for sure.  One of Scott's agents showed us a few properties too. 

@rfmaurone. Yes, I am the first owner. Spoke to my attorney again today and he insists I don't have to pay rental income tax for the first 15 years. I forwarded the information to the property mgmt company. They have never dealt with a confotur "certified" property...for lack of a better word. I hope this is related to lack of knowledge as opposed to an opportunity they saw to keep more money. 

Rental Income Tax vs Real Estate Tax,  I know the difference in the words, I have always ( 4 months) thought in terms of Real Estate or property tax, not a tax on income. When I have to deal with this I will speak to my retained attorney & ask for a referal for an account. For me knowing the laws and rules replaces the drama and noise and just makes for a better life expierence. Lastly when I find out what is the correct information, I will share here as this group is a great source of knowledge and it only gets better with lots of contributors. 
I absolutely agree. Whenever we can inform and confirm for others it's great! 
Guzman article -suggest you consult them.

It appears from another Guzman article that the benefit of zero sales transfer tax and property tax 2.10.


properties registered under Law No 158-01 on Tourism Promotion, belonging to first-time buyers (Individuals);

I tend to concur with 'planner' that there appears there is no exemption from taxes due to the Dominican state for rental income.

https://drlawyer.com/espanol/ley-de-inc … ey-195-13/

Tourism Incentive Law 158-01 (Modified by Law 195-13)

TOURIST INCENTIVE LAW 158-01 PURPOSE OF THE LAW Art. 1 . The Law for the Promotion of Tourism Development is established for poorly developed poles and new poles in provinces and localities with great potential, and the Official Fund for Tourism Promotion is created. Paragraph I (Modified by Law 195-13 ).

The objective of this law is to accelerate a rationalized process of development of the tourism industry in all regions with great potential or that have excellent natural conditions for their tourist or ecotourism exploitation throughout the national territory, which, having been declared or not as poles tourism have not reached, to date, the expected degree of development, or that can be developed and maintain standards and levels of competitiveness already established internationally.

Paragraph II . To this effect, it is established by means of this law and its regulations, the incentives that will be granted, by way of encouragement, to the projects and investments that contribute to the achievement of the identified objectives and goals.

Paragraph III (Modified by Law 195-13 ). The tourist poles located throughout the national territory, which have benefited or not with incentives in hotel facilities, will benefit according to the following conditions and scope:

a) Investments made in the development of tourist activities, hotels and complementary offers established in Art. 3 , will benefit from one hundred percent (100%) of the exemption regime established in Art. 4 of this law .

b) Investments in tourist activities indicated in Numeral 1, of Art.3 of this law, corresponding to hotel facilities, resorts or hotel complexes in existing structures, will benefit from the exemption of one hundred percent (100 %) of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) and other taxes that may be applicable on the machinery, equipment, materials, and movable property that are necessary for the modernization, improvement, and renovation of said facilities, provided that they have a Minimum of five (5) years of construction.

c) Hotel facilities, resorts and/or hotel complexes in existing structures that have been built for a minimum of fifteen (15) years and undergo a reconstruction or remodeling process that exceeds fifty percent (50%) of their facilities and whose final destination is hotel facilities, will benefit from one hundred percent (100%) of the exemption regime established in Article 4 of this law”.

THE OBJECT OF THE INCENTIVES : Art. 2.- All natural or legal persons domiciled in the country who undertake, promote or invest capital in any of the activities indicated in article 3 may avail themselves of the incentives and benefits granted by this legislation . and in the tourist centers and/or provinces and/or municipalities described in the previous article.

Art. 3.- It is declared of special interest for the Dominican State the establishment in national territory of companies dedicated to the tourist activities indicated below:

1. Hotel facilities, resorts and/or hotel complexes;
2. Construction of facilities for conventions, fairs, international congresses, festivals, shows and concerts;
3. Companies dedicated to the promotion of cruise activities that establish, as a mother port for the origin and final destination of their vessels, any of the ports specified in this law;
4. Construction and operation of amusement parks and/or ecological parks and/or theme parks;
5. Construction and/or operation of port and maritime infrastructures at the service of tourism, such as marinas and marinas;
6. Construction and/or operation of tourist infrastructures, such as aquariums, restaurants, golf courses, sports facilities, and any other that can be classified as an establishment belonging to tourist activities;
7. Small and medium-sized companies whose market is fundamentally based on tourism (handicrafts, ornamental plants, tropical fish, breeding farms for small endemic reptiles and others of a similar nature);
8. Basic service infrastructure companies for the tourism industry, such as aqueducts, treatment plants, environmental sanitation, garbage collection and solid waste.

OF THE INCENTIVES AND BENEFITS GRANTED BY THE LAW

 Art. 4.- Companies domiciled in the country that avail themselves of the incentives and benefits of this law, are exempt from paying taxes by one hundred percent (100%), applicable to the following lines:

a) of the tax on the income object of the incentives as indicated in article 2 of this law;
b) of the national and municipal taxes that are collected for using and issuing construction permits, including acts of land purchase, as long as it is used for one of the uses described in article 3 of this law;
c) Import taxes and other taxes, such as rates, duties, surcharges, including the Tax on Transfers of Industrialized Goods and Services (ITBIS), that may be applicable to the equipment, materials and furniture that are necessary for the first equipment and start-up of the tourist facility in question.

Paragraph I.- They will not be subject to the payment of taxes or any withholding, national and international financing, nor the interests of these, granted to the companies that are the object of these incentives;

Paragraph II.- Individuals or legal entities may deduct or deduct up to an amount of twenty percent (20%) of their annual profits, as long as they invest it in a tourism project that is included within the scope of this law;

Paragraph III.- There will be a total and absolute exemption of the machinery and equipment necessary to achieve a high profile in the quality of the products (ovens, incubators, production control treatment plants and laboratories, among others), at the time of implementation. 

Paragraph IV.- (Added by Law 195-13). The exemptions established by this law will be used by natural or legal persons who make one or more investments directly with the promoters or developers in any of the activities indicated in Art. 3 of this law, which are carried out throughout the national territory. , being excluded from such benefits any subsequent transfer in favor of third party purchasers.

Art. 5.- The establishment of new tax burdens, excise taxes, fees, etc., is prohibited during the tax exemption period.

Art. 6.- The granting of the incentives and benefits referred to in this law will be limited to;

a) Existing projects prior to the entry into force of this law

b) New projects whose construction begins after the entry into force of this law.

c) Those projects that meet the requirements established in literal c), of Paragraph III of Art. 1 of this law.
Paragraph: In all cases they must have the approval of CONFOTUR . 

EXEMPTION PERIOD.

Art. 7.- The tax exemption period granted to companies dedicated to tourist activities indicated in Art. 3, of this law, will be fifteen (15) years, from the date of completion of the construction work. construction and equipment of the project object of these incentives. A term is granted that will not exceed three (3) years in any case to begin the operation of the approved project in a sustained and uninterrupted manner, a term whose non-compliance will lead to the ipso facto loss of the acquired exemption right.
Paragraph: The tax exemption period established in this article will also apply to tourism projects already classified that are in use of the established tax exemptions.

Art. 8.- The application of this law will be in charge of a Tourist Development Council, whose acronym will be (CONFOTUR). It will be chaired by the Secretary of State for Tourism and will also be made up of:

1. A representative of the Secretary of State for Finance;
2. A representative of the National Association of Hotels and Restaurants, Inc. (ASONAHORES);
3. A representative of the Tour Operators (OPERTUR);
4. A representative of the Technical Undersecretary of Tourism, who will act as Secretary.
5. A professional in environmental impact (ecologist) of recognized capacity, selected by the Secretary of State for the Environment;
6. A representative of the Secretary of State for Culture.

Art. 9.- The classification request files of the interested parties to avail themselves of the terms of this law will be deposited in the office of the Secretary of State for Tourism, which will keep a record of said requests in the manner established the CONFOTUR regulation.

Art. 10. The files submitted to the knowledge of the Tourism Development Council must be approved or rejected, with reasonable reasons, in a period that will not exceed, in total, sixty (60) days.

Art. 11.- Classification requests that are favorably received by CONFOTUR will be subject to a resolution that will contain the statement of the technical and economic characteristics that have served as the basis for its decision.

Art. 12.- The Secretary of State for Tourism will ensure faithful compliance with the provisions established in this law, through inspectors, who, duly authorized, may carry out inspections in the entire area of ​​the zone, and, in case of infringement of the law, its regulations or the regulations of all to that effect, they must draw up certificates of verification of the same, which will attest to its content until proven otherwise. Paragraph.- The records of verification of infractions must be submitted by the Secretary of State for Tourism to the Attorney General of the Republic, who will send them to the fiscal attorney of the corresponding judicial district.

Art. 13.- In case of violation of this law, by natural or legal persons, it will imply the automatic loss of the incentives and the corresponding payment of the amounts not paid, in light of this law of incentives.

OF THE REQUIREMENTS FOR THE PRESENTATION OF THE RECORDS

 Art. 14.- The new projects that request to avail themselves of the incentives and benefits created by this legislation must be formulated and presented together with the following documents:

1. An environmental impact study that considers the type of project, the required infrastructure, the impact zone and the sensitivity of the area. Less important tourism infrastructure projects will be exempt from submitting an environmental impact study;

2. An architectural blueprint, as well as its preliminary engineering details, prepared by a recognized professional or firm of capable Dominican professionals, legally practicing. The consultancies, consultations or participation of foreign specialists in the formulation of preliminary architectural or engineering studies, or in the subsequent stages of the development of the project, will be carried out in any case through a local professional firm or duly authorized to exercise, which will have in charge of the elaboration and legal responsibility of this;

3. Projects that plan to handle fuel volumes and/or involve heavy vessel traffic must be accompanied by a contingency plan to prevent and control fuel spills.

Paragraph.- For their execution and construction, the projects approved and benefiting from the incentives and benefits created by this law, must be submitted for the approval of the municipal and urban planning agencies according to the corresponding and competent jurisdiction, and to the issuance of the approval or authorization of the Tourism Development Council (CONFOTUR).

Art. 15- Before starting construction, and once the authorizations required for this purpose have been obtained, all infrastructure projects must present a bank guarantee to cover the costs of environmental recovery if, due to negligence of the promoter, any damage is caused to the environment.

Art. 16.- The Secretary of State for Tourism will be responsible for guaranteeing that no infrastructure project is approved within protected areas or national parks, unless, through a study, it is shown that it will not represent a danger to the preservation of the natural resources nor will it threaten the flora and fauna.

SANCTIONS 

Art. 17.- The companies that are established in accordance with the incentives and benefits of this law must guarantee the preservation of all natural resources and due protection of the environment.
Paragraph.- The Secretary of State for Tourism will be responsible for guaranteeing that, during the construction and operation of any company established in accordance with the benefits of this law, all natural resources in the environment are respected and preserved.

Art. 18.- The lack of maintenance of the level of quality and quantity of services corresponding to the indicated category during the tax exemption period, prior notification procedure by the Secretary of State for Tourism and the term granted for this purpose, as establishes the regulation, will determine the suspension of the incentives and benefits granted.

OF THE SPECIALIZATION OF THE FUNDS FOR TOURISM PROMOTION

Art. 19.- With the objective of promoting in a more effective way the promotion of the Dominican Republic in international markets, issuing tourists, and by virtue of the creation by this law of new poles tourism, the Official Fund for Tourism Promotion is established, which must be administered by the Secretary of State for Tourism and will have the advice of the private sector, mainly the National Association of Hotels and Restaurants, Inc. (ASONAHORES), and other institutions of the sector. This Fund will be administered in accordance with the following provisions:

1. The totality of the values ​​that are collected by the application of the aeronautical rate per transported passenger, in entry and exit, in non-regular international flights or charters, charged by the General Directorate of Civil Aeronautics, will be specialized 50% (fifty per percent) for the Official Tourism Promotion Fund under the management of the Secretary of State for Tourism;
2. The remaining 50% (fifty percent) will correspond to the operational fund of the General Directorate of Civil Aviation, to be used in specific programs of that Directorate, in order to improve the safety of civil aviation in the Dominican Republic;
3. The totality of the amounts generated by the tourist card in all the airports and ports of the country can be deposited directly in the percentage established in the respective accounts of the institutions indicated above in numerals 1 and 2 of this article.

OTHER PROVISIONS 

Art. 20.- A period of one hundred and twenty (120) days is granted to the Executive Power, after the enactment of this law, to prepare and publish the regulations corresponding to it.

Art. 21.- The statements contained in this law shall prevail over any provision established by previous laws or administrative measures that have been previously issued by the Executive Power.

It appears from another Guzman article that the benefit of zero sales transfer tax and property tax 2.10.


'properties registered under Law No 158-01 on Tourism Promotion, belonging to first-time buyers (Individuals);'

There appears to be no mention of exemption from territorial taxes due to the Dominican state for rental income albeit some real estate agents promote this whilst also not noting the first time buyer issue. 

Another matter to consult with a lawyer is buying off plan. You don't get a  title until completion so this may complicate the benefit on sales transfer tax.

Article 2 needs lawyer input too. 'Natural or legal persons domiciled in the country' appear to be the beneficiaries.
Thanks for this!

@planner from the firm I retained. 

@lennoxnev. Thanks for sharing this info. This doesn't reference rental income but the Confotur website does. My attorney is from Guzmán Ariza and he is sure about the rental income exception. I will continue to share info as I get it.

@RoCamilo excellent !

https://confotur.mitur.gob.do/index.php/beneficios/


Benefits

- Is excluded from income tax on natural or legal persons who undertake, promote or invest capital in activities regulated by law, as well as those who develop new projects or complementary offers, whether by concession, lease and any other form of agreements. with the Dominican State in the tourist centers indicated in the law and in accordance with Article 3 of the same.

- It is excluded from national and municipal taxes for the incorporation of already established companies.
National and municipal taxes for the concept of transfer rights of real estate rights, for sales, exchanges, contributions in nature and any other form of transfer.

- It is excluded from Real Estate Property Tax (IPI)

- Fees, rights and quotas for the preparation of plans, studies, consultancies, supervision and construction of the works to be executed in the tourism project in question, this last exemption, applicable to contractors.

- It is excluded from import taxes and other taxes such as rates, duties, surcharges, including the transfer tax for industrialized goods and services (ITBIS), which may be applicable to the machinery, equipment, materials and personal property that are necessary for the construction and for the first equipment and start-up of the tourist facility in question.

- Does not apply withholdings on national and international financing, nor the interests of these, granted to the companies that are the object of these incentives.

- Natural or legal persons may deduct from their net taxable income the amount of their investments in tourist projects included within the scope of this law, being able to apply the amortization of said investments up to (20%) of their taxable income, each year, in In no case will the amortization period exceed 5 years.

- Total and absolute exemption of the machinery and equipment necessary to achieve a high profile of the quality of the products (ovens, incubators, production control treatment plants and laboratories, among others), at the time of implementation.

These incentives apply to new construction projects that meet the requirements of the law.

The exemption period is 15 years from the completion of the construction work, 3 years are granted to start operations in a sustained and uninterrupted manner the approved project.

Is renting stated as exempt? 

If you lease it appears you would be exempt. 

Raises another subject. The exemption on property tax and perhaps rental income would be an annual claim for exemption for the period of validity of the Confotur in place. You would need the documentation in place (for your accountant) to claim those exemptions annually.

I tend to think that income from a rental is a personal income for the owners and subject to personal taxation rules rather than property based taxes for which the Confotur exemptions were created and so that would be taxable at 16%?

A tax lawyer/accountant is needed.....

In reality no so many properties have Confotur so most buyers will be paying the transfer tax, property taxes as they apply and tax on rentals - for that latter I suspect many aren't by arranging the letting through online platforms or payment abroad - but is that secure as DGII tightens things up?
Ask a professional experienced in this!!

Everything is subject to interpretation.
The apartment we owned here in LT was covered by Confutur. The transfer tax waiver and property tax exemption were big selling points and featured prominently on the development's website, but even though the sales manager knew that we had plans to rent, an exemption of taxes on rental income was never mentioned. Our attorney handled the taxes and we paid every year.
From what I have read here sounds like an outstanding tax attorney is required, could anyone recommend one please?
My wife and I are considering a vacation villa near Sosua covered under CONFOTUR, and plan to rent it out while we are not there. We too have received conflicting expert opinions about income tax exemption from rental revenues. 

We've consulted a lawyer at Guzman Aria who insists that rental income is not exempt from Dominican income tax. Another reputed DR based lawyer reassures us that rental income is in fact exempt.

We plan to structure a DR based LLC to purchase the property with the expectation that if we sell within the CONFOTUR period, that the buyer may benefit from balance of the CONFOTUR period (the first owner still being the LLC would not change, just the shareholders of the LLC).

With margins so tight, it would be nice to get a definitive answer on the income tax exemption from rental revenues. At 27%, it is a deal breaker.
@RoCamilo @RoCamilo I'd be curious to learn of your Guzman Ariza experience. The advice we've received from Guzman Aria (Sosua) is contrary to yours. The Guzman Aria (Sosua) attorney states:

Taxes exemptions granted by Confotur benefits only the developers of tourism proyects such as Casa Xxxxx

If Casa Xxxxx´s application is approved by the Department of Treasury, you as a third person might be benefited with exemption for the transference taxes, but not for the incomes obtained from the commercial activities in which you might eventually use your property.


This is in direct contrast to advice received from another Sosua based lawyer who came highly recommended:

Yes it is exempt of income tax even thru AirBnb, the listing on the AirBnb account has to be registered under the Form W-8BEN.


So at this point we may have to solicit a third opinion to break the tie.
Could the confusion be?:

- if you rent a property in DR you do not pay ITBIS unless it is furnished in which case you are providing a service element with movable items which are taxable

- but the income from a rental is personal earned income in the Dominican Republic and residents or non residents would be subject to territorial income tax.

From what I have read, I don't think Confotur has any bearing on your income tax liabilities when renting property.

You can ask your questions directly to the Dominican taxation authority and get the real answer.

Here is a DGII forum reply in relation to ITBIS (you can google translate as answer below):


Good afternoon, Sword. Thanks for writing to us.

In the case of rental of real estate destined for housing, the withholding of the Tax on the Transfer of Industrialized Goods and Services (ITBIS) does not apply, since this service is exempt from said tax.

However, in the event that movable property is included together with real estate intended for housing, without defining the rental value of the latter, it will be presumed that the taxable base of the tax constitutes a minimum of 20% of the total value of the service. hired.

Remember that through the  Virtual Office  you can make your requests, presentations and queries easily and safely. Visit:  www.dgii.gov.do/ofv 

This site 

[link moderated]

explicitly lists 

- The tax on declared rental revenues which represents 27%.
under the heading CONFOTUR BENEFITS FOR END BUYERS.

I've reached out for additional details and will share their response once received.

Place your query with ayuda.dgii.gov.do for a defintive answer. 

It is the official government help portal for the tax ministry - DGII. 

@lennoxnev I cannot register for an account on that site without a cedula. Am composing email instead, will update this channel on receipt of response.

Lennox  the ITBIS  tax is not the  tax on income  - there is some confusion here on this forum.

Also holding the  rental unit or real estate  inside a corporation will change things.  Corporate tax is not the same as personal taxation.  

This thread just  shows how confusing things can be here!  Experts cannot agree let alone  the rest of us!