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For investors benefiting from Puerto Rico’s tax incentives under Act 22 or Act 60, compliance with the terms of the grant is crucial to maintaining eligibility for the program’s benefits. While each grant represents a separate contract negotiated individually with the Puerto Rican government, there are common compliance points that appear in many grants. Ensuring adherence to these requirements is vital to avoid penalties or revocation of benefits. Here are some critical points you need to verify regarding your tax grant: 1. Condition for Effectiveness The tax exemption grant under Act 60 will not take effect immediately if the grantee was not a resident of Puerto Rico when the grant was approved. To activate the grant: Implication: Until these steps are completed, the tax benefits cannot be utilized. This ensures that only genuine residents benefit, aligning with the program’s goal of boosting local economic activity. 2. Property Acquisition Requirements Alternative Option: The grantee may purchase land and construct a home within the two-year window. Proof of construction completion must be included in the annual report for the tax year of completion. 3. Annual Filing Requirements Failure to file these reports may result in penalties or grant revocation. 4. Nonprofit Donation Obligations From the second year after the grant becomes effective, grantees must donate at least $10,000 annually to Puerto Rican nonprofits: 5. Capital Gains Tax Treatment 6. Termination of Residency If a grantee ceases to be a resident of Puerto Rico: Important Reminders Staying ahead of these requirements ensures you maximize the benefits of your tax grant while avoiding penalties or revocation. For those considering this opportunity, it’s crucial to be thoroughly informed and prepared to comply with all stipulations to fully benefit from Act 60. Should you require additional guidance or have specific inquiries, seeking tailored professional advice is highly recommended. For further assistance or more information, please feel free to contact us at [email protected] or 787-473-8985. Disclaimer: The information provided herein is for informational purposes only and should not be construed as legal or tax advice.

If you’re benefiting from Puerto Rico’s Act 20 or Act 60 tax incentives, staying on top of compliance is crucial. Missed deadlines or overlooked requirements can lead to penalties, loss of tax benefits, or even revocation of your grant. Here’s a step-by-step guide to conducting a DIY compliance audit to help you manage Act 20 and Act 60 obligations effectively. Step 1: Verify Your Filing Deadlines To maintain compliance under Act 20 or Act 60, it’s essential to track all filing deadlines, including forms, reports, and declarations. Below is a detailed list of due dates, extensions, and notes to keep you on track: Additional Note: Estimated tax payments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year. Step 2: Ensure Residency Compliance For individuals receiving Act 20 or Act 60 benefits, maintaining bona fide Puerto Rico residency is crucial. Ensure you meet the following requirements: Potential Risks: Step 3: Check for Business Expansion or Model Changes If your business has expanded, changed its operations, or moved locations, confirm that the new activities are aligned with your original Act 20 or Act 60 decree. If your business model or services no longer match the original decree criteria, a re-evaluation or amendment may be necessary. Also, if your business address has changed, be sure to update it with all relevant agencies, including the IRS, Hacienda, Puerto Rico State Department, Department of Labor, and FINCEN (for the BOI report). This keeps your records accurate and prevents unnecessary compliance issues. Step 4: Prepare for Possible Audits or Compliance Checks Regular audits and compliance checks by the Puerto Rican Department of Treasury or the Department of Economic Development and Commerce (DDEC) are part of the Act 20 and Act 60 oversight. Be prepared to provide: Step 5: Understand the Consequences of Non-Compliance Failure to meet the requirements of Act 20 or Act 60 can lead to serious consequences, such as: Final Thoughts Conducting a DIY audit of your Act 20 or Act 60 compliance is an effective way to stay organized and protect the benefits you have worked hard to achieve. This list can serve as an annual compliance review, helping you confirm that you’re on track with filings, residency requirements, and any operational changes. For additional guidance or support with complex requirements, consulting a professional familiar with Act 20 and Act 60 compliance can provide added peace of mind. For further assistance or information, please contact us at [email protected] or 787-473-8985. Disclaimer:The information provided is for informational purposes only and should not be considered legal or tax advice. Consult with a qualified attorney or tax advisor to discuss your specific situation.

En Puerto Rico, ciertos tipos de ingresos están exentos de impuestos, lo que puede reducir significativamente la carga fiscal de los contribuyentes. Aquí exploramos las principales fuentes de ingresos exentas, los porcentajes de exención aplicables, y los requisitos necesarios para calificar. ¡Sigue leyendo para descubrir cómo puedes beneficiarte! 1. Cuota de Ajuste por Costo de Vida para Empleados del Gobierno de EE. UU. en Puerto Rico 2. Subsidio Federal para Planes de Medicamentos Recetados 3. Ingresos de Corporaciones Especiales Propiedad de Trabajadores 4. Compensación por Desempleo 5. Exención para Servicios Militares Activos en Zonas de Combate 6. Ingresos Devengados en la Serie del Caribe de Béisbol 7. Ingreso por Operaciones de Aseguradores Internacionales 8. Ingresos para Investigación en Instituciones Educativas Conclusión Estas exenciones fiscales están diseñadas para aliviar la carga tributaria de ciertos grupos de contribuyentes y fomentar actividades importantes en Puerto Rico, como la investigación, el empleo de trabajadores y el apoyo a programas sociales. Es recomendable que los contribuyentes consulten con un asesor fiscal para asegurarse de cumplir con todos los requisitos y aprovechar al máximo los beneficios disponibles. Con este conocimiento, puedes reducir tu carga fiscal y, al mismo tiempo, contribuir al desarrollo económico de Puerto Rico. Para asistencia o información adicional, por favor contáctanos en [email protected] (mailto:[email protected]) o al 787-473-8985. Aviso Legal: La información proporcionada es solo para fines informativos y no debe ser considerada como asesoramiento legal o fiscal. Consulta con un abogado o asesor fiscal calificado para discutir tu situación específica.

Selling property in Puerto Rico as a non-resident can come with some unique tax obligations. One of the most significant is the withholding tax applied to sales of real estate or shares located in Puerto Rico. However, if you meet certain requirements, you may be eligible to request a refund of that withheld tax. Here’s a guide to understand when this applies, the benefits, and the steps for non-residents looking to reclaim withheld taxes. Understanding Puerto Rico’s Withholding Tax for Non-Residents When a non-resident sells property in Puerto Rico, the buyer is typically required to withhold a portion of the sale price as tax. This amount can vary: This withheld amount is then deposited with the Puerto Rico Department of Treasury as a tax on the seller’s potential profit from the sale. However, not every sale results in a profit, and some sellers may have already paid the relevant taxes on the gain. This is where the refund application comes in. Do You Qualify for a Refund? A non-resident seller may qualify for a refund if: Benefits of Applying for a Refund If you meet the criteria, applying for a refund can help you recover the amount withheld during the sale, provided you submit adequate documentation to support your claim. How to Apply: Required Documentation Applying for a refund requires thorough documentation, so it’s essential to organize these key items: Additional Considerations If the property was acquired through inheritance or donation, or if permanent improvements were made, additional documentation may be required. For example: Filing the Application The completed application, along with the required documentation, should be submitted to the Puerto Rico Department of Treasury by the 15th of the month following the sale date. Late submissions may result in the application being filed away without review, so timeliness is crucial. Conclusion Navigating Puerto Rico’s withholding tax refund process can be complex, especially for non-residents selling property on the island. However, with careful preparation and a clear understanding of the required documents, non-resident sellers can recover withheld taxes and maximize their returns on Puerto Rican property investments. For more insights or questions about the withholding tax refund process, feel free to reach out in the comments below! For further assistance or information, please contact us at [email protected] or 787-473-8985. Disclaimer:The information provided is for informational purposes only and should not be considered legal or tax advice. Consult with a qualified attorney or tax advisor to discuss your specific situation.

“Filing taxes is voluntary”: This statement is misleading. While it is true that the IRS does not have the authority to force you to file a tax return, the tax code itself is mandatory. If you meet the income thresholds, you are required to file a tax return. Failure to file can result in penalties and interest charges. “Your tax preparer is liable for your taxes”: This statement is false. While tax preparers can be held liable for errors or fraud on your tax return, they are not responsible for the taxes you owe. The taxpayer is ultimately responsible for the accuracy of their tax return and the payment of any taxes owed. “Students do not need to file taxes”: This statement is misleading. Whether or not a student needs to file a tax return depends on their income and other factors. If a student has earned income, they may need to file a tax return, even if they are still in school. “You can choose your filing status”: This statement is false. Your filing status is determined by your marital status and other factors. You cannot simply choose your filing status. “Remote employees can take home office deductions”: This statement is misleading. While it is true that remote employees may be eligible for home office deductions, there are specific requirements that must be met. The home office must be used exclusively for business purposes and must be the primary place of business. “Gifts are considered taxable income”: This statement is false. Gifts are generally not considered taxable income to the recipient. However, if the gift is given in exchange for services or if it is a large gift from an employer, it may be taxable. “Cash and Crypto are Not taxable”: This statement is false. Cash and cryptocurrency are both taxable. Income from cash transactions and cryptocurrency transactions is subject to tax. “Filing an extension means you have longer to pay taxes”: This statement is false. Filing an extension only extends the deadline for filing your tax return, not the deadline for paying your taxes. If you owe taxes, you must still pay them by the original deadline or you may be subject to penalties and interest charges.