Compliance

Puerto Rican residents to report their Foreign Financial Accounts (“FFA”)

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The Law 52-2022 added Section 1061.25 to the Puerto Rico Internal Revenue Code of 2011, as amended (“Code”), to require all Puerto Rican residents to report their Foreign Financial Accounts (“FFA”) in which they have a financial interest. This requirement became effective starting in the tax year 2022. The Puerto Rico Department of Treasury (“Department”) introduced the FFA Individual Schedule (“FFA Schedule”) as part of the Individual Income Tax Return Form 482 (“Tax Return”) for this purpose. Key Points: This Administrative Determination Núm. 23-03 is effective immediately. It’s important to note that tax laws are subject to changes and revisions, and the information regarding this law may have evolved since its period of effectiveness. Therefore, it is essential to consult with an updated tax advisor in Puerto Rico for accurate guidance on how this law may affect your tax situation. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

New registration requirement for all existing and new entities

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The Corporate Transparency Act (CTA) became federal law in the United States on January 1, 2024. This legislation requires certain companies to provide detailed information to the United States Department of the Treasury about individuals who hold ultimate control over the entity, whether directly or indirectly. The CTA has a clear purpose: to combat practices such as money laundering, terrorism financing, and other financial crimes. Through the obligation to report the real beneficiaries, the law aims to hinder the use of companies as shields to conceal illicit activities. This regulation has a broad scope, applying to various forms of businesses, from corporations to limited liability companies (LLCs), limited partnerships, and business trusts, among other similar entities. However, it is important to note that there are exceptions, such as publicly traded companies, those subject to other federal property disclosure laws, and those with fewer than 20 employees and annual gross revenues of less than $5 million. Companies under the jurisdiction of the CTA must provide the following information about their real beneficiaries: Additionally, companies are also obligated to provide information about the applicants for the company, the individuals who submit the application for the entity’s creation. It is important to emphasize that companies that do not comply with the information requirements established by the CTA may be subject to penalties, including civil fines of up to $500,000 and imprisonment sentences that could extend up to two years. The implementation of the Corporate Transparency Act represents a significant step in the fight against financial crime in the United States. By requiring companies to disclose their real owners, the law aims to thwart those criminals attempting to use companies as veils to conceal their illicit activities. It’s important to note that tax laws are subject to changes and revisions, and the information regarding this law may have evolved since its period of effectiveness. Therefore, it is essential to consult with an updated tax advisor in Puerto Rico for accurate guidance on how this law may affect your tax situation. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

Best practices to comply with the presence test

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Here are some best practices to comply with the presence test: If you follow these best practices, you will be more likely to meet the presence test and be considered a resident of the state or territory where you want to live. Here are some additional tips: If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

Act 60 for Export Services & Commerce and for Individual Investors (formerly Acts 20/22)

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We have a strong practice in Act 60 for Export Services & Commerce and for Individual Investors (formerly Acts 20/22). We counsel and advise clients who are seeking to relocate to Puerto Rico to benefit from these tax incentives. Act 60 is a law that provides tax benefits for businesses and individuals who relocate to Puerto Rico. For businesses, Act 60 offers a reduced income tax rate of 4% on net income derived from export services and commerce activities. Businesses also receive exemptions from property taxes, municipal taxes, and taxes on dividend distributions. For individuals, Act 60 offers a 100% exemption from Puerto Rico income taxes on interest and dividend income, and on certain capital gains realized and accrued after the individual becomes a bona fide resident of Puerto Rico. Individuals must meet certain requirements to qualify for these benefits, such as making an annual donation to local nonprofit organizations and purchasing real property in Puerto Rico for use as their principal residence. We can help you assess whether you are eligible for the tax benefits of Act 60 and guide you through the application process. Contact us today to learn more. Here are some specific details about the tax benefits of Act 60 for Export Services & Commerce: Here are some specific details about the tax benefits of Act 60 for Individual Investors: If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

What is the Tax Home Test

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The tax home test is a rule used by the Internal Revenue Service (IRS) to determine an individual’s tax home for the purpose of determining their state of residency. The tax home test is based on the location of the individual’s principal place of employment. To meet the tax home test, the individual must have a principal place of employment. This could be a physical location, such as an office or factory, or it could be a mobile location, such as a truck or boat. If the individual does not have a principal place of employment, they may still meet the tax home test if they have a temporary employment assignment. Once the individual has determined their principal place of employment, they must then determine the location of their tax home. The location of the tax home is the location of the principal place of employment, unless the individual has a closer connection to another location. To determine if the individual has a closer connection to another location, the IRS considers a number of factors, including: If the individual has a closer connection to another location than to their principal place of employment, then that location is their tax home. The tax home test is just one of the factors that the IRS uses to determine residency. Other factors include the individual’s domicile, the location of their permanent home, and the location of their family and friends. If you are unsure whether you meet the tax home test, you should consult with a tax advisor. Here are some additional things to keep in mind about the tax home test: If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisors to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

What are the best practices to comply with the Tax Home Test

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Here are some best practices to comply with the Tax Home Test: If you follow these best practices, you will be more likely to meet the Tax Home Test and be considered a resident of the state or territory where you work. Here are some additional tips: If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

What is the Closer Connection Test

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The Closer Connection Test is a rule used by the Internal Revenue Service (IRS) to determine an individual’s state of residency for tax purposes. The Closer Connection Test is used when an individual does not meet the Tax Home Test, but they have a closer connection to one state than to any other state. To meet the Closer Connection Test, the individual must have a closer connection to one state than to any other state based on a number of factors, including: If the individual has a closer connection to one state than to any other state, then that state is their state of residency for tax purposes. The Closer Connection Test is just one of the factors that the IRS uses to determine residency. Other factors include the individual’s domicile, the location of their permanent home, and the location of their family and friends. If you are unsure whether you meet the Closer Connection Test, you should consult with a tax advisor. Here are some additional things to keep in mind about the Closer Connection Test: Here are some examples of how the Closer Connection Test might be applied: The Closer Connection Test can be a complex and subjective rule, so it is important to consult with a tax advisor if you are unsure whether you meet the test. If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.

What are the best practices to comply with the Closer Connection Test

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Here are some best practices to comply with the Closer Connection Test: If you follow these best practices, you will be more likely to meet the Closer Connection Test and be considered a resident of the state with which you have a closer connection. Here are some additional tips: If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisor to see if you qualify and help you with the application process. I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985. Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.