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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.

If you are looking for alternatives to expand your current operations or investment opportunities, now is the time to bring Puerto Rico at the front and center. The benefits of establishing, relocating or expanding businesses in Puerto Rico are, without a doubt, attractive and rarely surpassed by any other jurisdiction.

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.

Act 52 of June 30, 2022 (“Act 52”) modified several Sales and Use Tax (“SUT”) sections of the Puerto Rico Internal Revenue Code of 2011, as amended (“the Code”), expanding the scope of the term "marketplace seller" and "marketplace facilitator" to include the sale of “admission rights”. As a result of these amendments, the Puerto Rico Treasury Department (“PRTD”) reviewed the process to be followed by ticket seller companies and promoters to comply with the new rules. This article will guide you on the post-Act 52 requirements and processes that impact these businesses.

This is the second article of the two-part series dedicated to topics to discuss with your tax advisor at the beginning of the year. If you missed the first edition refer to New Year's Checklist- Stay Ahead of your Taxes (Part I) Planning for current year tax filings | Grant Thornton In our last article, we summarized the benefits of having a strategy call with your tax advisor to address items affecting your tax liability for the year-end early on. In this article, we will address key areas to consider that will help you proactively address aspects of the tax year currently in place. Discounts available for early tax payments Municipal license tax The PR Municipal Code requires the payment of the municipal license on the first 15 days of the semester for the business year.

The Corporate Transparency Act (“CTA”) established reporting requirements for certain entities (known as reporting companies) that are formed or operated within the United States of America (“U.S.”). The CTA mandates the submission of the Beneficial Ownership Information Report (“BOI Report”) to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”), with the purpose of enhancing transparency and reducing illicit financial activities. This tax update offers a brief overview of the requirements for the BOI Report and Kevane Grant Thornton (“KGT”)’s outlook to this new registration and filing requirement amidst the upcoming tax season.

New Year's Checklist- Stay Ahead of your Taxes (Part I) Planning for current year tax filings

Tax Considerations for Digital Nomads and Remote Work: How the rise of remote work affects businesses and their taxation in Puerto Rico.

Net operating losses (NOLs) can be a boon for corporations that experience a down year, allowing them to offset taxable income in other years. But, NOLs come with complex rules and limitations, so it's important to understand your options. This article will answer all your frequently asked questions about NOLs, including what they are, how to calculate them, whether they can be carried back or forward, how to claim them, and what limitations and special rules apply. By the end, you'll have the knowledge you need to use NOLs to your corporation's advantage.

This publication is part of a four-part series. For a discussion on our previous articles in this series, refer to the following links: Puerto Rico Opens its Doors for Disregarded Entities | Grant Thornton Three become One: The New Pass-Through Entity Category | Grant Thornton Puerto Rico Income Tax Deductions for Corporations: A Step-by-Step Guide | Grant Thornton

Small and medium-sized businesses, also known as PyME or PyMEs (for its Spanish translation), represent an important sector of the Puerto Rican economy, as they play a substantial role in generating employment opportunities for the Island and boosting economic growth. According to the Department of Economic Development and Commerce (DEDC) PyMEs Annual Report, in 2019 PyMEs accounted for 91.4% of the total establishments in Puerto Rico, contributing 44.8% of the total jobs in the private sector, and representing 39.2% of the total payroll in Puerto Rico’s private sector during such year.

Small and medium enterprises play a substantial role in the Puerto Rican economy, as they generate many employment opportunities. Following the Government of Puerto Rico’s public policy on finding ways to strengthen this sector, the State Insurance Fund Corporation (SIFC) has introduced an incentive program through Administrative Order 23-04.

Over time, commercial transactions are constantly evolving due to digitalization and globalization of markets. Recent global events, such as the COVID-19 pandemic, further accelerated the transformation from the traditional work model into today's digital workplace. In this same way, governments are constantly adapting their tax rules to further regulate this new business environment according to the new market trends and needs. For example, the South Dakota v. Wayfair case (138 S. Ct. 2080), demonstrates how governments are adapting to technological advances while they continue collecting revenues digitally. This article provides a brief overview of the tax implications of the 2018 Wayfair ruling for Puerto Rican taxpayers, and how this case impacted the Puerto Rico Sales and Use Tax (PR SUT) since its issuance.

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Small and medium enterprises play a substantial role in the Puerto Rican economy, as they generate many employment opportunities. Following the Government of Puerto Rico’s public policy on finding ways to strengthen this sector, the State Insurance Fund Corporation (SIFC) has introduced an incentive program through Administrative Order 23-04.

This publication is part of a four-part series – Pass-through Entities, Corporations, and Individuals. For a discussion on our previous articles in this series, refer to the following links: Three become One: The New Pass-Through Entity Category | Grant Thornton Puerto Rico Opens its Doors for Disregarded Entities | Grant Thornton