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Puerto Rico has positioned itself as a competitive jurisdiction for private equity funds through Act 60-2019, known as the Puerto Rico Incentives Code (“Incentives Code”). This article provides a high-level overview for fund managers, investors, and advisors of how private equity funds are structured, taxed, and regulated in Puerto Rico, with a focus on preserving tax incentives and mitigating compliance risks.

A Practical Guide to U.S. Transfer Pricing Rules and Their Application to Intellectual Property Transfers. Intellectual property (“IP”) is a cornerstone of value for many businesses operating in today’s global economy. When companies with related entities in different countries transfer IP, U.S. transfer pricing rules come into play. This article explains the key considerations for U.S. transfer pricing as it relates to intellectual property, offering guidance for business leaders who may be unfamiliar with these rules. Our goal is to clarify the IRS’s approach, the methods for valuing IP, and highlight compliance requirements and potential risks.

Instability has come to define the global business landscape. Today, business leaders face an unprecedented array of both routine operational challenges and unpredictable global or regional shocks – challenging their ability to function and grow. From infrastructure breakdowns and cyberattacks to climate disasters and volatile shifts in global trade, disruption has become a daily reality.

The Grant Thornton Network continues delivering strong results, despite the volatile and uncertain world we live in, thanks to our strategic focus on sustainable growth. Growth that comes from building the capabilities that clients need and where they need them; a relentless focus on quality and risk management; and the care we show for our most valued asset – our culture and the people who make Grant Thornton what it is.

Puerto Rico offers various tax exemption grants to eligible entities, providing significant tax advantages and growth opportunities. Knowing the Sales and Use Tax (“SUT”) implications for entities that are beneficiaries of tax exemption grants is crucial for effective planning, establishing goals, and strategies, as well as minimizing the impact on the organization's finances.

Puerto Rico offers various tax exemption grants to eligible entities, providing significant tax advantages and growth opportunities. Knowing the Sales and Use Tax (“SUT”) implications for entities that are beneficiaries of tax exemption grants is crucial for effective planning, establishing goals, and strategies, as well as minimizing the impact on the organization's finances.

Puerto Rico offers various tax exemption grants to eligible entities, providing significant tax advantages and growth opportunities. Knowing the Sales and Use Tax (“SUT”) implications for entities that are beneficiaries of tax exemption grants is crucial for effective planning, establishing goals, and strategies, as well as minimizing the impact on the organization's finances.

In the pursuit of business expansion, businesses have a wide array of options when deciding their approach on how to achieve their goals. Mergers and acquisitions (“M&A”) offer the opportunity to rapidly expand business operations while decreasing the risks associated with starting a new operation or expanding from scratch. However, M&As are not immune to tax implications for the parties involved in the transaction. As such, when considering M&A transactions, it is important to evaluate all of its implications in order to determine which type of deal is right for you. This article provides a summary of important key points that should be pondered when conducting M&A transactions.

For many years, the Puerto Rico Treasury Department (PR Treasury) has been looking for ways to oversee the amount of expenses that entities in Puerto Rico get charged or allocated by related entities outside Puerto Rico. In Puerto Rico, it is very common to have entities operating here as subsidiaries or branches of foreign entities, where the Parent Company or Home Office is in the United States or elsewhere.

Tax incentives for the film and creative industries in Puerto Rico: exploring the benefits for businesses in the creative sectors. Puerto Rico has been a favorite destination for filmmakers, artists, and creative entrepreneurs, because of its dynamic culture, beautiful scenery and advantageous position. The creative industries serve as an economic embodiment of culture, highlighting Puerto Rico’s exceptional quality of life both locally and internationally. The enactment of Act 60-2019, known as the Puerto Rico Incentives Code, has firmly established the island as a global hub for film production, digital media, and other creative industries. This comprehensive tax incentive law is a game-changer, offering producers, filmmakers, and other creatives significant economic advantages to bring their projects to life.

Did you know that the government of Puerto Rico has implemented various tax breaks and incentives to encourage businesses to go green? These offer a series of financial benefits to businesses that incorporate sustainable and eco-friendly practices into their operations. This article will provide you with knowledge about the incentives and what benefits they offer to businesses.

Choosing the right business structure is one of the most important decisions any entrepreneur or business owner needs to make. This decision will not only affect the daily operations of the business but will also have a direct impact on how income, deductions, and overall tax obligations are treated. In Puerto Rico, the tax laws are unique and while there are similarities with the federal tax regulations in the United States, they have distinctive characteristics that can significantly influence your tax situation.

In Puerto Rico, the treatment of manufacturer’s rebates and warranties affects the sales price of tangible personal property and its corresponding Sales and Use Tax (“SUT”). Despite the fact that the Puerto Rico Treasury Department published guidance on this matter, sellers and buyers had different views on how to treat the rebates and warranties when computing the sales price of a transaction, which in turn resulted in discrepancies over the accuracy of the seller's SUT calculation.

In today's rapidly evolving global economy, businesses must continuously innovate and update their technology, products, and services to stay competitive. Research and Development (R&D) is critical in this process, driving innovation and enhancing the companies’ offerings. These activities stimulate competition, promote economic growth, and create a healthier business environment.

Excise taxes play a fundamental role in Puerto Rico's fiscal policy, impacting both individuals and businesses across various sectors. Understanding the complexities of these taxes, along with available exemptions and strategic management approaches, is essential for maintaining compliance and optimizing financial strategies. Excise taxes in Puerto Rico are specific taxes imposed on the sale, use, consumption, importation, or manufacture of certain goods. They are different from income taxes and sales and use taxes, focusing on targeted items. These items are detailed in Sections 3020.01 through 3020.12 of Subtitle C, Chapter 2. of the Puerto Rico Internal Revenue Code of 2011, as amended, (“PR Tax Code”). All sections cited below are in relation to the PR Tax Code.

On May 11, 2021, the Puerto Rico Treasury Department issued Administrative Determination No. 21-05 and determined that, for taxable years that begin after December 31, 2018, taxpayers will be able to deduct 100% of the expenses incurred or paid to stockholders, related persons or entities not engaged in trade or business in Puerto Rico, as long as the expenses are based on a Transfer Pricing Study that has been issued and is available at the time of filing the tax return. This article will provide you with an explanation of what exactly is transfer pricing, and how a Transfer Pricing Study may benefit your business.