The Trust is a legal act through which one or more persons deliver assets or rights to a fiduciary entity to create a separate estate that that entity will administer to benefit another person or the person who distrust characteristics
- They does not have a legal personality (although it is a taxpayer).
- It can serve any legal purpose.
- It is presumed irrevocable.
- They contains goods of any nature.
- It constitutes a separate patrimony.
- It is constituted in writing and before a notary.
- They has a registered advertising regime that makes it opposable to third parties.
- Succession Planning Trust: The type of Trust in which the Settlor appoints a trustee so that the Trustee receives all or part of his assets as fiduciary property, who undertakes to exercise it is the beneficiary that has remained designated.
- Investment Trust: The Trust, whose main purpose is the investment or placement of sums of money to any title, under the instructions contained in the constitutive act.
- Real Estate Investment and Real Estate Development Trusts: These are trusts whose primary objective is an investment in real estate projects in different design and construction phases for their conclusion and sale or lease.
- Trust for the Public Offering of Securities and Products: It is a trust with the following and exclusive purpose of supporting public offering issues made by the Trustee, charged to the trust assets.
- Guarantee Trust: Is that legal act by which the Settlor transfers the fiduciary ownership of one or more assets to the Trustee, guarantees with them or with their fruits, the performance of one or certain obligations in charge of the Settlor or a third party.
- Cultural, Philanthropic and Educational Trusts: Refers to those non-profit trusts whose purpose is to maintain and preserved cultural heritage, such as Museums, The promotion and promotion of education, The execution of philanthropic work of any kind, among others.
- Other types of trusts: Any trusts can remain created as long as the purpose thereof is not contrary to the provisions established by Dominican law. Also read:The Controversy at TechCrunch: Conflicts of interest
Who is involved in the Trust?
So, They are the people who transfer assets or rights to form a separate estate that will be called trust assets.
- They can be natural or legal persons.
- They must have the legal capacity to dispose of the assets and rights that are the object of the Trust.
- It can be entities of public law and private law.
- The purposes you seek must be lawful.
Apparently, It is the entity that receives the assets or rights of the Settlor for the creation of the separate patrimony and its administration. The Trustee’s obligations will arise primarily from the trust agreement..
The main Obligations of the Trustee are the following:
- Manage and maintain assets separate from yours and from the trusts that you administer.
- Be accountable to the Settlor or Trustee, as appropriate.
- Manage with prudence, diligence and care, the assets that make up the trust assets.
- Please dispose of the goods and adhere to the contract in its administration.
- Transfer the assets of the Trust to whom it corresponds.
- Defend the trust assets.
- We are not guaranteeing results or returns.
- Do not delegate their functions.
- Failure to appropriate the Trust.
- Do not perform acts for the benefit of its administrators.
Trustee or beneficiary: The Natural or Legal Person in favour of whom the Trustee or trustees administer the assets given in Trust. The benefactor is the one who receives the assistance of the Trust, and the Trustee is the one who has to keep the remainder once the Trust remains finalized. In many cases, it is common for the Trustee or beneficiary to be the same Settlor.
Like the Settlor, the Trustee can be a Natural or Legal Person.
Also, The designation of non-existent beneficiaries and even beneficiaries that remained determinable is allowed.
An existing or expected existing legal entity is allowed to remain appointed as a Trustee.
Who is Entitled to act as Trustees?
Legal persons constituted in agreement with the laws, with the exclusive purpose of acting as Trustee. These companies must register and report on the start of their operations with the DGII. The trust company for exclusive use, which does not belong to a financial group, is under the supervision of the DGII.
Frequently, Banks, Savings and Loan Associations and other financial intermediation entities authorized for such purposes by the Economic Board. In the exercise of their fiduciary function, these companies are under the supervision of the Superintendency of Banks.
Requirements for the Application to Register the Trust with the RNC
- Affidavit Form for the Registration and Informing of Separate Estate Data (RC-03), signed and sealed by the Trustee on behalf of the Trust, with the corresponding annexes duly completed.
- Copy of the trust contract registered with the corresponding Chamber of Commerce and Production.
- Report of the assets subject to valuation simplified on the date of the involvement.
- Print of the certificates of titles or registrations in the cases that real estate or vehicle influences remain made.
- Trustee authorization, according to the corresponding supervisory entity.
- If it is a public offering trust, it must remain authorized by the Superintendency of Securities (SIV). Include SIV certification that allows it.
- If it is a trust related to a financial intermediation entity, it must remain authorized by the Superintendency of Banks (SIB). Include SIB certification that qualifies it.
- If a trust whose object stay supervised or regulated by another institution, it must deposit the due authorization.
Similarly, Once the RNC has remained obtained, the Legal Persons authorized to act as Trustee must request the Trust the Tax Receipt Numbers(NCF) for its operations, according to the procedures established by the DGII.
Main tax Obligations of Trusts
On behalf of the Reliance, the trustees will pay the taxes established in Law No. 189-11 except for the exceptions that have continued granted by type of Trust.
The Main tax obligations established by law and Tax Regulations are:
- Tax Declaration on Transfers of Industrialized Goods and Services (ITBIS).
- Payment of the Real Estate Transfer Tax.
- Amount of the Real Estate Tax (IPI).
- Monthly submission of all data delivery formats,
The earnings generated by the trust assets are subject to the payment of income tax when being distributed to the beneficiaries and trustees. The distribution of benefits, declaration and amount of the tax must remained carried out at least once a year, no later than December 31 (except Successor Trusts and Public Offering Trusts). The Real Estate Development Trusts request the extension for the distribution of benefits until the end of the project’s construction or the sale of all units.
The trustees must submit the following information annually on behalf of the Trust:
- Names and surnames, denomination or company name, identity and electoral card or National Taxpayer Registry (RNC) of the Settlors, trustees, beneficiaries and trustees.
- Class or type of Trust.
- Description of the trust activity.
- Information of the good or goods and a total amount for deliveries of money or goods made by the fiduciaries in the period to remain reported. And the accumulated total for each reported period.
- Therefore, Debt securities and certificates of participation: nominal and residual value of the securities.
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