Tax Benefits for Investing in Local R&D and Innovation
Tax Insight Tax Benefits for Investing in Local R&D and Innovation
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.
7 min read |
Sales and Use Tax: The impact of manufacturer's rebates and treatment of warranties
Tax Insight Sales and Use Tax: The impact of manufacturer's rebates and treatment of warranties
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.
9 min read |
A Deep Dive into Puerto Rico's Excise Taxes
Tax Insight A Deep Dive into Puerto Rico's Excise Taxes
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.
3 min read |
Transfer Pricing: What is it and how can it benefit my business?
Tax Article Transfer Pricing: What is it and how can it benefit my business?
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.
6 min read |
Puerto Rico Issues New Rules for Disregarded Entities for Simpler Tax Filing
Tax Insight Puerto Rico Issues New Rules for Disregarded Entities for Simpler Tax Filing
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.
2 min read |
Preparing for Puerto Rico Treasury Tax Audits
Tax Insight Preparing for Puerto Rico Treasury Tax Audits
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.
8 min read |
Changes in sales and use tax rules for promoters of public shows and ticket seller companies
Tax Article Changes in sales and use tax rules for promoters of public shows and ticket seller companies
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.
Javier Oyola
| 7 min read |
New Year's Checklist- Stay Ahead of your Taxes (Part II) - Planning for next year's filings
Tax Article New Year's Checklist- Stay Ahead of your Taxes (Part II) - Planning for next year's filings
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.
Madeleine Tubens
| 6 min read |
Essential information on the BOI Report and your responsibilities
Tax Alert Essential information on the BOI Report and your responsibilities
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.
5 min read |
New Year's Checklist- Stay Ahead of your Taxes (Part I) Planning for current year tax filings
Taxes New Year's Checklist- Stay Ahead of your Taxes (Part I) Planning for current year tax filings
New Year's Checklist- Stay Ahead of your Taxes (Part I) Planning for current year tax filings
Madeleine Tubens
| 7 min read |
Tax Considerations for Digital Nomads and Remote Work: How the rise of remote work affects businesses and their taxation in Puerto Rico.
Taxes Tax Considerations for Digital Nomads and Remote Work: How the rise of remote work affects businesses and their taxation in Puerto Rico.
Tax Considerations for Digital Nomads and Remote Work: How the rise of remote work affects businesses and their taxation in Puerto Rico.
Vanessa Rodríguez
| 6 min read |
Puerto Rico Income Tax Deductions: A Step-by-Step Guide for Individual Taxpayers
Tax Insights Puerto Rico Income Tax Deductions: A Step-by-Step Guide for Individual Taxpayers
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
Isabel Hernández
Francisco Luis
Omar Mues
| 16 min read |

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