01 Feb 2018 Non-Withholding Agents Annual Report Due Date Postponement
Pursuant to Section 4041.03 of the PR Code, every merchant who is not a withholding agent for sales and use tax (“SUT”) purposes shall send a notice, on or before January 31 of each year, to all Puerto Rico purchasers who acquired merchandised from said non-withholding agent. A copy of such notice (“Annual Report”) shall be filed with the PRTD within thirty (30) days of the delivery of the notice to the purchasers in Puerto Rico.
On January 29, 2019, the PRTD issued the Internal Revenue Informative Bulletin Number 19-03 to postpone the due date of the Annual Report for calendar year 2018 until July 1, 2019. This new due date will apply to both the notice to all purchasers in Puerto Rico and for the filing of the Annual Report with the PRTD. The PRTD will be issuing a publication to provide more details about the procedure for the filing of these annual reports.
Optional Contribution for Certain Taxpayers
On February 1, 2019 the PRTD issued the Circular Letter of Internal Revenue 19-02 to clarify the requirements to tax the gross income received by the taxpayer from services rendered pursuant to Sections 1021.06 and 1022.07 of the PR Code (“Optional Contribution”). The requirements for this Optional Contribution are the following:
- The income received must be substantially from services rendered (the term “substantially from services” has been defined as at least eighty percent (80%) of the taxpayer total income, comes from services rendered).
- All income paid during the taxable year must be reported in an informative return, and
- All income received must be subject to the withholding of the income tax at source, or subject to estimated tax payments.
This Optional Contribution is only available for self-employed individuals and for service corporations. The rates of this Optional Contribution are as follows:
- Gross Income up to $100,000 – 6%
- Gross Income from $100,001 – $200,000 – 10%
- Gross Income from $200,001 – $300,000 – 13%
- Gross Income from $300,001 – $400,000 – 15%
- Gross Income from $400,001 – $500,000 – 17%
- Gross Income in excess of $500,000 – 20%
Flexibilization of the Application Process and Renewal of Internal Revenue Licenses
On February 18, 2019 the PRTD issued the Internal Revenue Informative Bulletin Number 19-05 to streamline and make more flexible the process of application and renewal of Internal Revenue Licenses. Therefore, the PRTD informs that, until June 30, 2019, merchants may request, or renew their Licenses in the applicable renewal period, without considering the existence of tax debt for any concept as a requirement for this renewal. Please note, that every merchant must comply with the other requirements established by the Secretary for the application or renewal of Licenses. The moratorium established through this Informative Bulletin will not apply to merchants who have Prior Periods Licenses pending to complete its renewal.
Filing of the 2018 Income Tax Return for Individuals:
On February 18, 2019 the PRTD issued the Circular Letter of Internal Revenue 19-04 to set the rules of the filing process for the 2018 Income Tax Returns for Individuals. As per prior years, the return shall be filed electronically no later than Monday, April 15, 2019. There are some exemptions for this requirement of electronic filing, which are similar as the ones last year with some exceptions. For the complete list of exemption of filing electronically please refer to Form 483.2 (Exception to the Electronic File of individuals). Note that if any of the exemptions for the electronic filing applies, the taxpayer must file the Income Tax Return on paper, together with the mentioned Form 483.2.
This post is part of FPVG Pulse | Issue 1.