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Are you happy that your number of YouTube subscribers is growing or that your followers in your Insta account are multiplying? If your income tax return does not reflect this growth, you may be liable for tax evasion. As any other taxpayer, Youtubers, Influencers, and Bloggers are required to declare their income received from these activities in their individual income tax returns. Staying compliant with your income tax responsibilities should be a top priority. Especially nowadays, as the Puerto Rico Department of Treasury (“PRDT”) has increased its scrutiny in this area and has been noticeably public about it. In this article, we take a closer look at tax rules for influencers in Puerto Rico (“PR”) and the implications they may face for failing to comply with your income tax responsibilities.

On June 30, 2022, the Puerto Rico Governor signed Act 52-2022, which modified the 2011 Puerto Rico Internal Revenue Code, as amended (the “Code”), among other matters. Specifically, Act 52-2022 introduced into the Puerto Rican tax system the figure of Disregarded Entities and revolutionized the concept of Pass-Through Entities. Under the new rules, Partnerships, Corporations of Individuals and Special Partnerships will now be treated under the umbrella of Pass-Through Entities.

It has been months of candid discussion since the enactment of Act 52 of June 30th, 2022, known as the Puerto Rico Public Finances Stabilization Act (hereinafter “Act 52-2022”). Act 52-2022 introduced a potpourri of amendments to tax-related legislation. Amendments impacted the 2011 Puerto Rico Internal Revenue Code (“PR Code”), the Puerto Rico Incentives Code, and the Puerto Rico Municipal Code to position Puerto Rico as an attractive destination to do business. As a significant change presented by Act 52-2022, disregarded entities (“DREs”) were recognized for the first time for PR income tax purposes. As stated in the Statement of Motives of Act 52-2022, this adoption seeks to simplify tax compliance burdens for the PR working class. Subsequently, the PR Treasury Department issued Administrative Determination 22-10 (“DA 22-10”) and Administrative Determination 23-01 (“DA 23-01”), which shed light and provide a set of rules for entities that want to elect or revert its taxable treatment. Many business owners frequently structure their businesses as Limited Liability Companies (“LLCs”). It also aligns Puerto Rico with the tax regimen of the US federal tax code and other US states that have adopted this tax treatment for these entities. One of the most important decisions when creating a business is electing the most suitable business organization form. This decision will impact aspects of your business including taxation, and your personal legal liability. Here in we discuss, in general terms, the most common ways to do business in Puerto Rico (“PR”) using a legal entity and what you should know about the implications that the enactment of Act 52-2022, and related publications, bring with respect to DREs.

On June 30th, 2022, the Governor of Puerto Rico signed into law Act 52-2022, known as the Puerto Rico Public Finances Stabilization Act (hereinafter “Act 52”). This new law introduced multiple amendments to the 2011 Puerto Rico Internal Revenue Code (hereinafter “PR Code”), Puerto Rico Incentives Code (hereinafter “Act 60”), Puerto Rico Municipal Code, Act 73-2008, Act 135-1997, and other laws. Act 52 pursues to simplify the tax system, strengthen the fiscalization of tax incentives and tax credits, and position the island as an attractive destination to invest and start a business. This article is focused on the most significant amendments contained within Act 52 related to Act 60 and its Regulations.

Employees contracted before January 26, 2017 Every employee having worked at least 700 hours in the twelve-month period commencing October 1 and ending September 30 is entitled to receive a mandatory Christmas Bonus. The bonus is 6% of the employee’s wages up to a maximum employee individual wage of $10,000. Accordingly, the maximum bonus payable will be $600. In the case of those employers with 12 or less employees, the applicable rate is 3% of the employee wages up to a maximum of $10,000 ($300) Employees contracted after January 26, 2017 Every employee having worked at least 700 hours in the twelve-month period commencing October 1 and ending September 30 is entitled to receive a mandatory Christmas Bonus. In case, that the employer employs 21 or more employees for 26 weeks within the coverage period, will be required to pay to each employee a bonus equal to 3% of the total salary earned up to a maximum bonus of $600.

On September 27, 2022, the Puerto Rico Department of Treasury (“PRDT”) released Administrative Determination No. 22-08 (“DA”) to establish tax relief measures for taxpayers affected by the aftermath of Hurricane Fiona (“Hurricane)” in Puerto Rico. The PRDT anticipates the challenges taxpayers may face in complying with their tax responsibilities due to interruptions in essential services such as electric power and internet that were caused by the Hurricane. As a result, the PRDT Secretary is exercising its power as vested by the 2011 Puerto Rico Internal Revenue Code, as amended (“the Code”) to extend deadlines for payments of tax as well as the fillings of any returns or statements. The PRDT emphasizes that at the moment, all the services provided by the platform SURI are operating normally. Those taxpayers that are able can make tax debt payments, request automatic payment plans, and request certifications, among others.