Tax Grants / Compliance
Tax Grant Compliance Requirements
Obtaining your Puerto Rico tax grant is only the beginning of the process. To retain your unprecedented Puerto Rico tax advantages, you must remain in compliance with a number of rules and reporting requirements. Violating any of the compliance terms puts your grant at risk.
Unfortunately, it can be confusing to deal with the various Puerto Rico government agencies involved; sometimes forms and government documents are not available in English, and sometimes government representatives, though bilingual, have not mastered all of the nuances of the English language, which can result in miscommunications.
Because this is such an important area, we are committed to ensuring that you understand all that is required for compliance, and introduce you to expert service providers who can help you.
Tax Grant Compliance Services
Compliance requirments we can manage for you:
There are a number of residency requirements that must be fulfilled for grant holders to take advantage of Puerto Rico tax breaks, which also must be fulfilled by any employee of an Act 20, Act 73, or Act 273 company. Residency requirements are rather complex for expats and include being in Puerto Rico for at least 183 days in every calendar year.
Starting in December of 2015, Act 22 grantees must purchase a residential property located in Puerto Rico. (This applies to Act 22 grantees only.)
Each Act 20 business applying for the grant as of December of 2015 is required to hire 3 employees that are Puerto Rico residents within 6 months of the Act 20 filing date, along with an additional 2 PR- resident employees within the first 2 years of the Act 20 filing date. (This applies to Act 20 grantees only.) Act 273 businesses must hire 4
Also for Act 20, thorough records must be kept regarding where corporate income is earned. For some businesses, some portion of the corporate income may not be eligible for the Act 20 tax advantage, if it is not earned according to the Act 20 rules.
Business formation and registration:
- Entity formation
- Merchant’s Registration for Sales and Use taxes
- Registration with the Municipal Treasurer
- Income Tax Return for Exempt Business Under the Puerto Rico Incentives Program (financial statements must be certified by a Puerto Rico CPA if business revenue exceeds $3,000,000)
- Any appropriate US tax returns (if applicable)
- Estimated Tax Payments
- Sales and Use Tax Monthly Return
- Annual Fee for LLC with State Department
- Municipal license tax
- Exempt Annual Report
- Volume of Business Declaration (financial statements must be certified by a Puerto Rico CPA if business revenue exceeds $3,000,000)
- Personal Property Tax Returns (financial statements must be certified by a Puerto Rico CPA if business revenue exceeds $3,000,000)
- Real Property Tax
- Usage permit
Employee filings and payments:
- Monthly Federal Social Security and Medicare payments
- Quarterly FUTA (Federal Unemployment) payments
- Quarterly Fed 941 Form
- Annual Fed 940 Form
- Monthly PR Withholding payments/filing
- Quarterly SUTA – PR Unemployment/filing
- Quarterly SINOT – PR Disability payment/filing
- Bi-annual Worker’s Comp Insurance payment/filing
- Christmas bonus
We Can Help
We are committed to ensuring that you understand all that is required for compliance, introduce you to expert service providers who can help, and answer any questions you might have.
Contact us for a free initial consultation!
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