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Compliance

Services / Compliance

Tax Decree Compliance Requirements

Obtaining your Puerto Rico tax decree 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.

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 Decree Compliance Services

Compliance requirments we can manage for you:

Residency:

There are a number of residency requirements that must be fulfilled for grant holders to take fullest advantage of Puerto Rico tax breaks.  Residency requirements are rather complex for US Citizen relocating from the mainland, with multiple ways to meet the “Presence Test”.  The most common method is to be in Puerto Rico for at least 183 days each year, though there are other options.

Real estate:

Starting with grantees applying after January 1, 2020, Individual Investors must purchase a residential property located in Puerto Rico.  (This applies to Individual Investors only.)

Business formation and registration:

  • Entity formation
  • EIN
  • Merchant’s Registration for Sales and Use taxes
  • Registration with the Municipal Treasurer

Employees:

Companies filing for many of Puerto Rico’s tax incentives have minimum employee requirements, though for many, there is no minimum required.  See pages about specific tax incentives for more information.

Bookkeeping: 

For export goods and services, thorough records must be kept regarding where corporate income is earned.  In some cases, some portion of the corporate income may not be eligible for the lower tax rate, if it is not earned according to the Act 60 rules.

Payroll: 

We can handle employee withholding and payment processing for you, freeing you up to grow your business.

    Other business reporting and filings:

    • 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

    Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

    Contact us for a free initial consultation.

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