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.

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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.

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.

Establishing New Legal Entity for Business Operations in Puerto Rico

When establishing a business in Puerto Rico, the business owners have an array of choices for when selecting the appropriate business type for their operations.  These include: Business Trusts, Cooperatives, Corporations, International Banking Entities, Insurance Companies, Joint Ventures, Limited Liability Company, Partnership, Public Private Partnerships, Real Estate Investment Trusts, Registered Investment Company, Sole Proprietorship.  When selecting a business model please be aware that each has its own set of rules for qualification, and each has distinct implications from the perspective of tax, insurance, and liability.  The facts and circumstances of a business owners operations are important in determining the appropriate type of business.

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.

Reminder: Puerto Rico Residency Rules for Personal Taxation

An individual is considered a a resident of Puerto Rico if he or she is considered domiciled on the island.  This usually means that a person must be present in Puerto Rico for at least 180 days per calendar year.  In addition for a person to be considered a bona fide resident of the island, one must not claim partial year residency in another local (in addition to other tests). The facts and circumstances are important in determining residency status.

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.

Amnesty (Relevo) Departamento de Estado - Deadline April 15, 2014

Departamento de Estado has approved an Amnesty. 

This is a great opportunity to pay any overdue Annual Fees and file any old Annual Reports. Late fees will be eliminated if filings are done before the April 15th deadline. 

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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.

Source Of Income Rules

The source of income is important in determining if the income may be excluded under section 933 of the Internal Revenue Code. Below are the general rules for determining the source of your income:

Example Of Source Of Income Rules

Item of Income: Salaries and other compensation  -  Factor Determining Source: Where the service is performed

Item of Income: Pensions Contributions  -  Factor Determining Source: Where services were performed that earned the pension

Item of Income: Pensions Investment earnings  -  Factor Determining Source: Where pension trust is located

Item of Income: Interest  -   Factor Determining Source: Residence of the payer

Item of Income: Dividends  -  Factor Determining Source: Location of payer

Item of Income: Rents  -  Factor Determining Source: Location of property

Item of Income: Royalties Natural resources  -  Factor Determining Source:  Location of property

Item of Income: Royalties Patents, copyrights, etc  -   Factor Determining Source: Where the property is used

Item of Income: Sale of real property  -  Factor Determining Source: Location of property

Item of Income: Sale of personal property  -  Factor Determining Source: *Seller’s tax home (but see Special Rules for Gains From Dispositions of Certain Property for exceptions)

 

 

*Caution: There are special rules for gains from dispositions of certain investment property (for example, stocks, bonds, debt instruments, diamonds, and gold) owned by a U.S. citizen or resident alien prior to becoming a bona fide resident of a possession. You

are subject to these special rules if you meet both of the following conditions:

• For the tax year for which the source of gain must be determined, you are a bona fide resident of Puerto Rico.

• For any of the 10 years preceding that year, you were a citizen or resident alien of the United States (other than a bona fide resident

of Puerto Rico).

• If you meet these conditions, gains from the disposition of this property will not be treated as income from sources within the relevant

possession for purposes of the Internal Revenue Code.

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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.