Puerto Rico Real Estate Investment Trusts (REIT)

Under Puerto Rico law Real Estate Investment Trusts are permitted to be formed allowing real estate ventures to receive a tax designation for corporations investing in real property that reduces or eliminates corporate income taxes.  This is designation is similar to REIT structures in the United States.  The definition of "Real Property" includes, Apartment Buildings, Hospital facilities, Hotels, Manufacturing buildings, Office buildings, Parking facilities, Shopping facilities, etc.

In order to become a REIT one needs to conform with type-of-income and source-of income requirements in the Puerto Rico code.  The rules include but are not limited to a requirement that Puerto Rico REITs must have 95% or more of the gross income be derived from:  

• Dividends; 

• Interest; 

• Rents from real property; 

• Gain from the sale or other disposition of securities or real property (with certain rules)

Additionally, at least 75% of gross income must be derived from:  

•  Rents from Puerto Rico real property;  

•  Interest on obligations secured by mortgages in Puerto Rico;  

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

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Disclaimer

The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

IRS CIRCULAR 230 DISCLOSURE: 

To comply with requirements imposed by the Department of the 

Treasury, we inform you that any U.S. tax advice contained in this communication (including any 

attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any 

taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) 

supporting the promotion or marketing of any transactions or matters addressed herein.

Export Service Companies - Act 20 Grant

Act 20, which provides incentives for export service companies of bona-fide residents of Puerto Rico provides certain incentives in the form of a grant.  The grant that is issued is actually a form of contract between the Puerto Rico resident and the government of Puerto Rico.  As such, the export services rendered and the services described under the under the contract must be materially be the same.  For the activities described in the contract, a 4% income tax rate is applicable.  However, for the services outside of those described in the contract, the regular Puerto Rico corporate income tax rate applies.

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

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Disclaimer

The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

High Volume Business Supplementary Information

In December of 2013, Puerto Rico enacted legislation known as Act 163 that added new requirements for filing in regard to high volume business. Among other things, taxpayers with a volume of business equal to $3 million dollars or greater are required to file supplemental information.  

Supplemental information includes:

Volume Business Declaration which contains information on total gross income, itemized income, sales returns.  For business like gas stations a declaration on the volume of gas sold is required.

Personal Property Tax Supplemental Information

Beginning year cash balances, cash in transit, Inventory

Income Tax Supplemental Information

Verification of withholdings and payment of wages, verification of proper sales and use tax payment, etc.

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

***

Disclaimer

The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

Job Posting: Accounting Bookkeeper / Analyst

POST DATE: June 5th, 2014
POST TITLE: Accounting Bookkeeper / Analyst
LOCATION/DEPARTMENT: Isla CPA – San Juan, PR (Miramar)
REPORTS TO: CPA Accountant    
WAGE TYPE: Hourly
HOURS: Monday – Friday (9:00AM – 5.30PM)

OBJECTIVE & RESPONSIBILITIES
Maintain accurate financial records and help prepare and analyze accounts for all types of businesses. Will be required to provide administrative and clerical support to CPA accountants. The position holder will be required to work flexibly, in a rapidly developing office environment. It may be necessary to assist other staff from time to time. 

The key duties of the position are as follows:

• General book-keeping duties to include:
• Double entry book-keeping;
• Processing sales invoices;
• Receipts and payments;
• Bank Account Reconciliations;
• Completing IVU returns;
• Preparing wage and withholding from source monthly deposits;
• Helping prepare P&L statements and balance sheets;
• Quarterly Payroll Returns and others;
• Communicate and liaise verbally and in writing between clients/visitors/enquirers and staff and interpret and respond clearly and effectively to spoken requests over the phone or in person, and to verbal or written instructions.
• Manage, organize and update relevant data using database applications.
• Establish and maintain effective working relationships with co-workers, supervisors and the general public.
• Maintain regular consistent and professional attendance, punctuality, personal appearance and adherence to relevant health and safety procedures.
• Adhere to procedures relating to the proper use and care of equipment and materials for which the role has responsibility.
• Plus other duties consistent with the position-level as directed.

For more information, please send a Resume and Cover Letter to careers@islacpa.com 

Because of the changing nature of our business your job description will inevitably change. You will, from time to time, be required to undertake other activities of a similar nature that fall within your capabilities as directed by management.

Act 20 Puerto Rico Export Service Companies

Act 20 is designed to provide tax benefits to business including but not limited to the following sectors:

• Advertising and Public Relations; 
  
• Economic, Environmental, Technological, Scientific Services
  
• Investment Banking/Financial Services; 
  
• Legal, Tax and Accounting Services; 
  
• Management, Marketing, Human Resources, Information and Audit Consulting Services;
  
• Software Development and Research/Development,
  

In order to qualify for the Act 20 tax grant, a business must have minimum of three employees, each of which must be a resident of Puerto Rico. Generally, the new Puerto Rico resident is one of such employees. Act 20's benefits include a reduced income tax rate and partial municipal license tax exemption over a 20 year period.  Benefits are through a grant of tax benefits issued by Puerto Rico's Secretary of the Department of Economic Development and Commerce.

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

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Disclaimer
The information on this website is general information and is for educational use and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

Puerto Rico Corporation Personal Property Tax Return

The return for Puerto Rico Corporation Personal Property Tax is due on the 15th of May each year.  A 90 day extension is available. 

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

***
Disclaimer
The information on this website is general information and is for educational use and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

Doing Business in Puerto Rico: Business Entity Registration at the Puerto Rico Tax Agencies

All Puerto Rico business operations must register with the appropriate agencies.  This list of agencies includes but is not limited to: Department of State, Treasury Department, Municipal Revenue Collection & the Municipality, State Insurance, and the Department of Labor & Human Resources.  For Sales & Use Tax registration, a business must present a Merchant Registration Certificate from both the Puerto Rico Government level and the Municipality. Certificate and registrations must be requested before the Company commences operations in PR.  Oftentimes provisional registrations will be promptly issued.

There are more rules and this post contains simplifications and is not comprehensive. Additionally, as always, a professional should be consulted and be presented with specific information.

***
Disclaimer
The information on this website is general information and is for educational use and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.