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It’s been almost two years since Act 52-2022 introduced a noteworthy change to Puerto Rico's income tax regime by adopting the Disregarded Entity (DE) treatment. This change aligns Puerto Rico’s taxation treatment of single-member entities with the one established by the U.S. federal tax code for DE. Its purpose is to foster local parity for owners who have elected this option for their entities in the U.S. One key aspect to consider is that certain local rules for DEs may differ from the ones established in the U.S.

On October 31, 2016, the Department of the Treasury launched the Unified Internal Revenue System, better known as SURI. Since then, there have been multiple updates and improvements to SURI, all in efforts to integrate and streamline tax and revenue administration to drop the complexity of having multiple systems for the benefit of the Treasury and the taxpayer. Each year it is more common for the processing time of electronically filed returns to decrease significantly, in some cases, it can take less than a week. Therefore, notices are received quickly easing a Tax Audit for the Treasury. We believe that an effective way to start and/or prepare for the 2024 tax season is to know the implications of an audit and how to be prepared for it. It is important to know the requirements that the law demands of taxpayers to follow the provisions of the Puerto Rico Internal Revenue Code of 2011. Although there are other types of audits in Puerto Rico, that are performed by the different governmental agencies in the Island, this article will cover tax audits by the Puerto Rico Treasury Department.

The Grant Thornton International Business Report (IBR) is the world’s leading mid-market business survey. Launched in 1992, IBR provides deep analysis and insight into the views and expectations of around 15,000 business leaders globally. The research runs quarterly, interviewing senior executives within mid-market organisations across 35 economies, from all industry sectors. Questionnaires are translated into local languages and fieldwork is undertaken through a mixed methodology, including online and telephone platforms.

If you are planning to do business in Puerto Rico, download this guide with information on the legal, accounting and taxation framework to keep you on the right track.