Puerto Rico Sales and Use Tax Modifications in 2014

On July 1st, 2014 Act No. 80 of 2014 was passed.  In the act were amendments regarding the Sales and Use Tax for Puerto Rico.

Modifications we made to: Monthly Sales and Use Tax Returns, Sales and Use Tax bond for Importers, Exempt Purchases Certificates, Foreign Trade Zones, and Sales and Use Tax Credit Limitations.

Some details of the modifications include: a new date for monthly Sales and Use Tax filing, a new form " Use tax Declaration for Release of Tangible Personal Property", and a new requirement for the Importers Bond to cover 100% of the Sales and Use Tax obligation plus an additional 25% for penalties and fees.  In addition, for the purposes of the Sales and Use Tax, tangible personal property destined for foreign trade zones within Puerto Rico must be declared and will be subject to Sales and Use Tax.

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 post (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.

Tourism Development in Puerto Rico

The Tourism Development Act of Puerto Rico of 2010 (Act 74) provides incentives for tourism businesses. This act covers hostels, guesthouses, hotels, condo-hotels, and timeshares/vacation clubs. In addition it includes theme parks, golf courses, marinas for tourism, however casinos are excluded.  

The Act also establishes a tax credit of the minimum of 10% of the total cost of the project or 50% of equity invested (including land). The credit is made available over a two year period. Any unused tax credits may be carried forward.  Additionally, the tax credits may be assigned, transferred or sold.  

In order to qualify, a business must be utilizing new facilities, substantially improved facilities or existing facilities which have not been used for three or more years. 

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.

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 post (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.

International Insurer and Reinsurer (Act 98)

Act 98 which is known as the International Insurer and Reinsurer Act (IIRA) enables the creation of international insurers, reinsurers and holding companies. These companies are eligible for attractive tax treatment. The intent of the act was to facilitate the growth of export insurance and reinsurance sectors by establishing a level playing field for Puerto Rico insurers to compete with Bermuda, Cayman Islands etc. Only insurer/reinsurers or another international insurer holding companies that are approved by the Commissioner of Insurance are eligible for this attractive tax treatment. Generally, the tax treatment is 0% on income tax dividends, distributions from liquidation, as well as other taxes. In addition, revenues for non-residents may also be exempt. 

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.

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 post (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.

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.

***

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.

***

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.