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The year 2021 brought new developments related to the Sales and Use Tax, including new initiatives that will make it easier for the Puerto Rico Treasury Department to look after mail-order sales. The changes started with Act 40-2020 which introduced two new categories of merchants to the Sales and Use Tax parlance, the Marketplace Facilitator, and the Marketplace Seller.

Federal income tax implications of certain capital gains derived by a new bona fide resident of Puerto Rico that previously resided in the United States.

The Puerto Rico Treasury Department and the Internal Revenue Service will investigate and audit certain individuals and entities tax matters.

At Kevane Grant Thornton we are fully authorized by Grant Thornton International to provide clients transfer-pricing services independently from other member firms. Transfer pricing refers to the price ascribed to transactions between entities in two different jurisdictions, such as when a parent company in one country sells goods or services to a subsidiary in another country.

Transfer pricing is the No. 1 international tax area of concern to multinationals, tax authorities are reviewing transfer pricing to tackle profit shifts that could be detrimental to the tax revenue of their countries or jurisdictions.

Commencing on tax year 2019 the Puerto Rico Internal Revenue Code of 2011, as amended (“Code”) provides a tax advantage for entities that incur or pay expenses to related entities that are not engaged in trade or business in Puerto Rico.

The Internal Revenue Service extends compliance relief to QOFs and their investors due to the ongoing COVID-19 pandemic.

The Puerto Rico Department of Treasury (the Department) recently eliminated the requirement to International Banking Entities (IBE) and International Financial Entities (IFE) to submit the Transfer Funds Report for transactions performed outside of Puerto Rico of $5,000 or more.

The Puerto Rico Department of Treasury issued Circular Letter 2021-01 informing the limits applicable for contributions to retirement plans and Circular Letter 2021-02 to establish the eligibility and procedures to be followed by those Puerto Rico eligible individuals interested in claiming the American Opportunity Credit for tax years 2018 and onwards.

Amendments to the Puerto Rico Incentives Code related to the acquisition of residential real estate and changes in the tax incentives for: Export of Goods and Services, Entrepreneurship, and Tax Credits as well as new incentives for recycling and transformation of scrap.

The Puerto Rico Department of State will eliminate fines and penalties to previous 2020 annual reports and annual fees.

Summary of President Joe Biden most relevant campaign tax proposals that could represent major changes going forward regarding Puerto Rico, highlighting important planning considerations.

The Puerto Rico Treasury Department has determined that the type of report that must be attached to the Income Tax Return at the time of its submission, to comply with Section 1061.15 of the Puerto Rico Internal Revenue Code of 2011, will be an Agreed Upon Procedures.

With the enactment of Act 40-2020, the requirements of submitting financial statements with the income tax returns for the years ending after December 31, 2019 have significantly changed. By increasing the volume of business threshold to $10,000,000, many businesses face the question to audit or not to audit.

Time to look ahead and consider some important tax planning aspects for the upcoming tax filing season.

An estate planning is not only planning for life after you die; it is also about planning for what happens with you and your property if you become disabled. Review these four changes brought in by the new Puerto Rico Civil Code that could affect your estate planning.