Today is April 15, 2025, and if you haven’t already filed or extended your returns, you’re out of runway. Whether you’re a corporation, pass-through entity, employer, or individual — today is packed with federal and Puerto Rico tax deadlines that carry real consequences if missed. Here’s your rapid-fire breakdown of what’s due, where to file, and how to avoid penalties. Puerto Rico Tax Filings Due Today Income Tax Returns & Reports Withholding & Estimated Tax Payments Informative Returns Employer Responsibilities Additional Items U.S. Federal Tax Filings Due Today Quick Access Portals Final Word: File extension and Call Your CPA Immediately This isn’t a drill. You have multiple critical deadlines converging today. If you’re not 100% sure what applies to you — call your CPA immediately. Filing extensions are available in some cases, but tax payments are not excused by indecision. Don’t assume you’re covered — confirm it. Pay what’s due. File what’s required. Avoid interest, penalties, and surcharges to keep more of your money in your pocket.
Stop wasting time and money due to supply chain issues
Puerto Rico is the Smart Choice for Optimizing Your Supply Chain Manufacturers today face mounting external and internal challenges that threaten supply chain stability. Over-reliance on distant suppliers has proven risky, as COVID-19 exposed the dangers of single-source dependency, causing massive disruptions across industries. Now, looming tariffs and trade restrictions add further uncertainty, driving up costs and forcing companies to rethink their global sourcing strategies. Internally, manufacturers struggle with rising labor costs, supply chain visibility issues, and logistical inefficiencies, making it harder to remain competitive. Puerto Rico provides a strategic alternative—offering the benefits of “Made in USA” manufacturing with shorter lead times, lower costs, and a skilled bilingual workforce, all while sidestepping many of the regulatory and financial risks associated with offshore production. it offers the perfect combination of proximity, financial incentives, and regulatory benefits—making it a strategic alternative to overseas locations. As a U.S. territory,Puerto Rico presents a unique solution: “Made in USA” advantages with offshore-like cost savings, seamless regulatory compliance, and a fast-tracked investment climate under Executive Order OE-2025-012. Key Benefits of Leveraging Puerto Rico 1. Tax Incentives for Business Growth 💰 Lower Tax Burden: Puerto Rico-sourced income is excluded from U.S. federal taxation. Under Act 60, many businesses qualify for tax rates between 0% and 10.5% (generally 4%). OE-2025-012 Fast-Tracks Investment: The newly enacted executive order establishes “Fast Track” approval processes and unique funding mechanisms, further reducing operational hurdles. Reinvestment Opportunities: Lower taxes mean higher profits that can be reinvested into innovation, workforce expansion, and infrastructure. 2. Regulatory & Legal Advantages ⚖️ U.S. Federal Laws Apply: Puerto Rico follows many of the same regulatory standards as the mainland, simplifying compliance. “Made in USA” Labeling: Products manufactured in Puerto Rico qualify as “Made in USA,” meeting domestic and federal procurement requirements. Robust IP Protection: U.S. intellectual property laws apply, ensuring strong patent, trademark, and trade secret protections. 3. Highly Skilled, Bilingual Workforce 👩💻👨💻 STEM Talent Pipeline: Over 20,000 STEM graduates annually from 80+ universities. Lower Labor Costs with Subsidies: Programs like WIOA and Registered Apprenticeships cover 50-90% of wages. Bilingual Workforce: Fluent in both English and Spanish, Puerto Rico offers a gateway to Latin America and U.S. markets. 4. Strategic Location & Logistical Efficiency ✈️ Proximity to Mainland U.S.: Puerto Rico is closer than most offshore locations, reducing shipping costs and delivery times. Time Zone Alignment: Operates in Atlantic Standard Time (AST), which is on a similar if not equal time-zone as your mainland teams facilitating real-time communications. Tariffs & Trade Restrictions: Geopolitical tensions are driving up costs and creating uncertainty for manufacturers. While Mexico and Canada are often considered nearshoring alternatives, potential tariffs could make them expensive options for U.S. companies. Meanwhile, China remains the largest supplier to U.S. manufacturers, but its distance, ongoing trade disputes, and looming tariffs pose significant risks to supply chain stability. 5. Fast-Tracked Reshoring & Expansion 🚀 OE-2025-012 Creates a “One-Stop Shop” for Investment: The new executive order mandates a single-window system for site selection, permitting, and tax incentives . Specialized Manufacturing Hub: Puerto Rico ranks #1 in U.S. pharmaceutical and medical device exports, making it an ideal location for biotech, aerospace, defense, and high-tech industries . Dedicated Workforce Development Funds: OE-2025-012 establishes a Workforce Training Fund to help businesses up-skill employees in advanced manufacturing . Why Now? The combination of reshoring incentives, streamlined regulatory processes, and Puerto Rico’s strong industrial ecosystem makes this the perfect time to relocate or expand your operations. Puerto Rico is competing directly with locations like Ireland, Singapore, and Costa Rica—but with the added advantage of U.S. jurisdiction and protections. By leveraging Puerto Rico’s unique advantages, businesses can enhance supply chain resilience, reduce operational costs, and stay competitive in a shifting global market. Ready to Optimize Your Business? If your company struggles with supply chain issues, it may be time to rethink where and how you manufacture and distribute. Puerto Rico could be the answer. 🚀 Puerto Rico offers a seamless, cost-effective, and strategic solution for companies looking to strengthen their supply chains. Take advantage of OE-2025-012’s fast-tracked investment opportunities and position your business for long-term success. Want to evaluate whether moving your operations to Puerto Rico is right for your business? Contact us today for a free consultation at [email protected]. #BusinessStrategy #PuertoRicoAdvantage #SupplyChainOptimization #TaxSavings #Reshoring #Growth
No le pague taxes a Hacienda – legalmente.
Incentivo para Jóvenes Empresarios en Puerto Rico: Una Oportunidad para el Éxito Empresarial Puerto Rico tiene incentivos increíbles. El mejor es para que los empresarios jóvenes creen su negocio sin preocuparse del Hacienda, el CRIM o patentes municipales. La Ley Núm. 60-2019, según enmendada, conocida como el Código de Incentivos, (“Ley 60”) provee el Incentivo para Jóvenes Empresarios en Puerto Rico ofreciendo un apoyo financiero significativo para que estos jóvenes entre 16 y 35 años conviertan sus sueños en realidades. Este incentivo proporciona exenciones completas contributivas y beneficios económicos diseñados para fomentar la innovación, retención del talento joven y el crecimiento económico entre los jóvenes empresarios. Los jóvenes empresarios que califiquen pueden disfrutar de los siguientes beneficios: Para calificar al Incentivo para Jóvenes Empresarios, los solicitantes deben cumplir con los siguientes requisitos: 3. Restricciones 4. ¿Cómo Solicitar el Incentivo? El proceso de solicitud es más sencillo que otros decretos y está diseñado para agilizar el inicio de negocios: Puerto Rico también ofrece otros programas para fortalecer el éxito de los jóvenes empresarios, tales como: Incubadoras y Aceleradoras de Negocios – Programas como Grupo Guayacán, Parallel18, y Colmena66 ofrecen mentoría, redes de contactos, herramientas y acceso a capital. Subvenciones y Préstamos a Bajo Interés – El Banco de Desarrollo Económico (BDE) proporciona financiamiento y el decreto de joven empresario que puede hacer elegible para otros fondos del DDEC son los fondos de incentivos económicos y los créditos de investigación y desarrollo. Este apoyo financiero para ayudar a los emprendedores con su capital inicial. Estos recursos ayudan a los jóvenes empresarios a desarrollar modelos de negocio sostenibles y a recibir orientación de expertos. Puerto Rico cuenta con una combinación ideal de ubicación estratégica, jurisdicción estadounidense y beneficios contributivos para negocios, lo que lo convierte en un destino atractivo para los jóvenes empresarios. Además, el costo de vida es más bajo que en muchas ciudades principales de EE. UU., permitiendo a los emprendedores maximizar sus recursos financieros. La Ley 60 reemplazó la Ley Núm. 135-2014 con el objetivo de simplificar y mejorar el acceso a incentivos para jóvenes empresarios. Aunque los beneficios se mantienen en gran medida, la nueva ley ofrece un proceso más centralizado, exenciones más claras y mayor estabilidad en su implementación. El Incentivo para Jóvenes Empresarios bajo la Ley 60 es una oportunidad única para jóvenes que desean establecer un negocio en Puerto Rico. Con hasta tres años de exenciones contributivas al 100% o hasta $500,000 en ingresos brutos, los jóvenes empresarios pueden construir el negocio de sus sueños y quedarse con más dinero en su bolsillo. Si estás listo para convertir tu visión en realidad, puedes ir directo a solicitar a través del Portal de Incentivos de Puerto Rico. Si tienes preguntas o necesitas asistencia solicita un reunión inicial gratis. ¡Inicia tu camino emprendedor con una poderosa ventaja contributiva! 🚀 #Ley60 #LibreDeImpuestos #PuertoRico #Incentivos #JovenEmpresario #MasDineroEnTuBolsillo Aviso legal: Esta publicación proporciona información general y no constituye asesoría legal. Los decretos están sujetos a negociación y los resultados no están garantizados. Consulta con un abogado antes de tomar decisiones basadas en esta información. Acceder o utilizar esta publicación no establece una relación abogado-cliente entre nosotros.
El BOI Regresó, ¿qué hago?
Comprendiendo la Ley de Transparencia Corporativa y los Requisitos de Reporte de Información sobre Beneficiarios Finales ¿Qué es la CTA? La Ley de Transparencia Corporativa (CTA, por sus siglas en inglés) fue promulgada en 2021 con el propósito de combatir el lavado de dinero, el fraude fiscal y otras actividades financieras ilícitas. Esta ley exige que ciertas empresas en EE.UU. informen a la Financial Crimes Enforcement Network (FinCEN, por sus siglas en Inglés) sobre sus beneficiarios finales.La información recopilada se almacenará en una base de datos segura y solo será accesible a agencias gubernamentales autorizadas, como las fuerzas del orden y las entidades regulatorias. ¿Quién es un Beneficiario Final? Un beneficiario final es una persona que, directa o indirectamente: Posee o controla al menos el 25% de la empresa mediante acciones, derechos de voto, participación en capital o contratos que otorgan control. Ejerce un control sustancial sobre la empresa, lo que incluye funciones como CEO, CFO, Asesor Legal o miembro de la Junta de Directores. También se incluyen aquellas personas que tienen la autoridad para nombrar o remover altos ejecutivos o tomar decisiones clave en nombre de la empresa. ¿Quién debe presentar un Reporte de BOI? Las siguientes “empresas que informan” deben presentar un Reporte de BOI ante FinCEN: Corporaciones, compañías de responsabilidad limitada (LLC) y entidades similares registradas en EE.UU. (esta definición incluye a Puerto Rico). Una de las preguntas que provee FinCEN para determinar si hay que registrar la empresas incluye si se tuvo que registrar en el Departamento de Estado. Sin embargo, en Puerto Rico, de conformidad con la Ley Núm. 55-2020, conocida como el “Código Civil de Puerto Rico”, sociedades, sociedades especiales, fundaciones y otras asociaciones de personas de interés particular, sean civiles, mercantiles o industriales (que tradicionalmente no se hubiesen tenido que registrar en el Departamento de Estado para formarse) deberán ser registradas en el Registro de Personas Jurídicas administrado por el Departamento de Estado. Por lo cual, debido a las multas altas puede proceder con cautela y registrar el BOI. Empresas extranjeras que operan en EE.UU. y están registradas en cualquier estado o territorio. Exenciones: Hay 23 categorías de entidades exentas, entre ellas incluidas: Bancos Empresas que cotizan en bolsa. Instituciones financieras reguladas. Compañía y productores de seguros Organizaciones sin fines de lucro registradas como entidades exentas a nivel federal. Las organizaciones sin fines de lucro en Puerto Rico que no están registradas federalmente como exentas no califican para la exención correspondiente. Grandes empresas operadoras. Las grandes empresas operadoras en Puerto Rico generalmente no califican para la , ya que no presentan contribuciones federales a menos que tengan ingresos provenientes de EE.UU. Entidades inactivas Fechas Límite para Presentar el Reporte de BOI según la CTA La CTA establece plazos específicos dependiendo de la fecha de formación de la empresa: Empresas formadas antes del 1 de enero de 2024: Fecha límite: 1 de enero de 2025. Empresas formadas en 2024: Deben presentar su reporte dentro de los 90 días posteriores a su registro. Empresas formadas a partir del 1 de enero de 2025: Deben presentar su reporte dentro de los 30 días posteriores a su registro. Importante: Algunas fechas límite han sido modificadas debido a varias órdenes judiciales. Incertidumbre Legal y Drama Judicial En 2024 y 2025, hubo múltiples demandas y órdenes judiciales que afectaron temporalmente la aplicación de la CTA. Este drama judicial de cambia-cambia causó mucha incertidumbre. A continuación, un resumen de los casos más relevantes: National Small Business United v. Yellen (N.D. Ala.) 1 de marzo de 2024: Un tribunal en Alabama determinó que la CTA excedía la autoridad del Congreso y bloqueó su aplicación contra los demandantes. 11 de marzo de 2024: El Departamento de Justicia (DOJ) apeló la decisión. Actualmente, la CTA no se está aplicando a los demandantes en este caso, lo que incluye la National Small Business Association (NSBA) y sus miembros. Texas Top Cop Shop, Inc. v. Garland (E.D. Tex.) 3 de diciembre de 2024: Un tribunal en Texas emitió una orden judicial nacional bloqueando la aplicación de la CTA. 23 de diciembre de 2024: El Quinto Circuito levantó la orden judicial, permitiendo que la CTA entrara en vigor nuevamente. 27 de diciembre de 2024: Otro panel del Quinto Circuito reinstaló la orden judicial. 23 de enero de 2025: La Corte Suprema de EE.UU. suspendió la orden judicial, permitiendo la aplicación de la CTA mientras el caso sigue en litigio. Smith, et al. v. U.S. Department of the Treasury (E.D. Tex.) 7 de enero de 2025: Un tribunal en Texas emitió una orden judicial nacional bloqueando la CTA. 5 de febrero de 2025: El Departamento de Justicia apeló la decisión y solicitó la eliminación de la orden bloqueando el CTA. 18 de febrero de 2025: El tribunal suspendió su propia orden, permitiendo que la CTA entre en vigor mientras la apelación sigue en curso. Actualmente, hay múltiples apelaciones pendientes en el Undécimo, Noveno y Cuarto Circuito, incluyendo National Small Business United v. Yellen, Firestone v. Yellen y Community Associations Institute v. Yellen. Sin embargo, solo el caso National Small Business United otorgó alivio judicial a sus demandantes. Sanciones por Incumplimiento Dado que la CTA sigue vigente, las empresas deben cumplir con el reporte de BOI. FinCEN ha extendido los plazos para algunas compañías, permitiendo que aquellas creadas en o que debían radicar el BOI entre el 3 de diciembre de 2024 y el 18 de febrero de 2025 presenten su BOI antes del 21 de marzo de 2025.Las sanciones por incumplimiento incluyen: Multas civiles de $591 por día hasta corregir la violación. Multas penales de hasta $10,000 y prisión de hasta 2 años en caso de incumplimiento intencional. Nota: Cualquier cambio en la información sobre el beneficiario final debe informarse dentro de los 30 días posteriores a la modificación. ¿Qué Información se Requiere en un Reporte de BOI? Para presentar un reporte de BOI, las empresas deben proporcionar: Información de la Empresa: Nombre legal, nombres comerciales, dirección principal y número de identificación fiscal. Información de
BOI is back. Now what?
Note: Para la versión en español, favor haz clic aqui. BOI is back, now what? Understanding the Corporate Transparency Act (CTA) and Beneficial Ownership Information (BOI) Reporting Requirements What is the CTA? The Corporate Transparency Act (CTA) was enacted in 2021 to combat money laundering, tax fraud, and illicit financial activities. The law requires U.S. businesses to disclose information about their Beneficial Owners to the Financial Crimes Enforcement Network (FinCEN), a division of the U.S. Department of the Treasury. This information is stored in a secure database accessible only to authorized government agencies. Who is a BOI? Beneficial Ownership Information (BOI) refers to details about individuals who own or exercise significant control over a company. Under the CTA, a beneficial owner is someone who: Who Needs to File a BOI Report? Companies required to file a BOI report include corporations, limited liability companies (LLCs), and similar entities created through state registration. However, 23 types of entities are exempt, including publicly traded companies, banks, insurance companies, financial institutions, and certain nonprofits. Please note that the large operating companies exemption generally does not apply to Puerto Rico as they do not file federal taxes unless they have US-sourced income. Similarly, Puerto Rico non-for-profit companies that are not registered federally as exempt entities do not qualify for the tax-exempt entity exemption. BOI Filing Deadlines per CTA The CTA established the following filing deadlines depending on when a company was formed: However, the deadlines have shifted for some due to multiple legal actions filed. Legal Uncertainty: Multiple Injunctions and Appeals There was much drama regarding the applicable deadlines for the BOI reporting in 2024 and early 2025. Due to multiple injunctions issued by federal courts, there has been significant legal uncertainty surrounding the enforcement of the CTA. Here is a summary of the most relevant cases. Penalties for Non-Compliance Given these developments, FinCEN’s regulations implementing the BOI reporting requirements are no longer stayed, and compliance is now mandatory. However, FinCEN is providing additional time for companies to report. FinCEN advised that for most reporting companies, the new deadline for companies created between December 3, 2024, and February 18, 2025, to file an initial, updated, and/or corrected BOI report is now March 21, 2025. While it has not been explicitly clarified, per CTA any entity created on or after February 20, 2025, will have 30 days to file to file the BOI. Failure to comply with the BOI reporting requirements can result in severe penalties: Note: Changes to beneficial ownership must be reported within 30 days. Failure to update your BOI report could result in penalties. What Information is Required in a BOI Report? To file a BOI report, companies must submit the following details: Need Help Filing Your BOI Report? Avoid penalties and ensure compliance with FinCEN regulations by filing your BOI report on time. We provide professional assistance to make the filing process stress-free. Contact us today to handle your BOI filing quickly and accurately! Disclaimer This post provides general information and does not constitute legal advice. Consult with legal counsel before making any decisions based on this information. Accessing or using this post does not establish an attorney-client relationship between us.
🚨 Don’t Lose Your Deduction – File Your 480s on Time! 🚨
Tax Season Has Begun! Businesses and self-employed individuals in Puerto Rico must ensure they correctly and timely file their 480 Informative Returns in SURI, the online system of the Puerto Rico Department of Treasury. These forms are the local equivalent of the federal 1099 informational returns. They are essential for claiming deductions on your income tax return while avoiding unnecessary penalties of $500 per late-filed form. Key 480 Forms & Their Deadlines: 📌 480.6A – Reports payments not subject to withholding (e.g., rents, interest, royalties). Due: February 28📌 480.6B – Reports payments subject to withholding (e.g., certain interest, dividends subject to 15% withholding or incentives decrees). Due: February 28📌 480.6C – For payments made to non-residents that had withholding at source. Due: April 15📌 480.6SP – Reports professional service payments (whether subject to withholding or not). Due: February 28📌 480.7E – (Optional) Documents payments for advertising, insurance, telecom, internet, and cable TV. Due: The same deadline as your income tax return (April 15 or extension date). Why You MUST File 480.7E Even If It’s Optional Many businesses skip Form 480.7E because it’s not mandatory, but failing to file it means you won’t be able to deduct these expenses on your income tax return for alternative basic tax or alternative minimum tax. If your business incurs costs for advertising, insurance, telecommunications, internet, or cable services, this form is necessary to secure your deduction. Key Filing Rules 🗓 Deadline to File: Forms must be submitted electronically via SURI. Recipients must receive their copy within 7 days after submission.🔹 If filing more than 2,000 forms, use a text file format.🔹 Otherwise, use Excel or manual entry in SURI. 📢 Don’t Overpay Hacienda! Failing to file your 480s can impact your deductions. February 28 is less than two weeks away. Make sure you have the legal name, address, and EIN/SSN of your suppliers and service providers. This information can be obtained through a W-9 or W-8BEN-E (yes, these are U.S. forms, but they are used in PR since the EIN and SSN are federally issued). If you don’t have this information yet, there’s still time—reach out and request it from your suppliers and service providers. Don’t leave money on the table! 🚨 Quieres reducir lo que le pagas a Hacienda ¡No pierdas tu deducción! Presenta tus 480s a tiempo 🚨 ¡La temporada de contributiva comenzó! Las empresas e individuos que hacen negocios por cuenta propia en Puerto Rico deben asegurarse de presentar correctamente y a tiempo sus Declaraciones Informativas 480 en SURI del Departamento de Hacienda de Puerto Rico. Estas informativas son el equivalente local de las declaraciones informativas federales 1099 y son fundamentales para reclamar deducciones en la planilla de contribución sobre ingresos, evitando multas innecesarias de $500 por informativa presentada tardiamente. Formularios 480 clave y sus fechas límite: 📌 480.6A – Reporta pagos no sujetos a retención (ej. rentas, intereses, regalías). Vence: 28 de febrero📌 480.6B – Reporta pagos sujetos a retención (ej. ciertos intereses, dividendos sujetos a retención del 15% o decretos de incentivos). Vence: 28 de febrero📌 480.6C – Para pagos realizados a no residentes con retención en la fuente. Vence: 15 de abril📌 480.6SP – Reporta pagos por servicios profesionales (ya sea con o sin retención). Vence: 28 de febrero📌 480.7E – (Opcional) Documenta pagos por publicidad, seguros, telecomunicaciones, internet y televisión por cable. Vence: el mismo día que la planilla de contribución sobre ingresos (15 de abril o la fecha de extensión). ¿Por qué DEBES presentar el Formulario 480.7E aunque sea opcional? Muchas empresas omiten el Formulario 480.7E porque no es obligatorio. Sin embargo, no presentarlo significa que no podrás deducir estos gastos en tu planilla de contribución sobre ingresos para el contribución básico alterna (CBA) o el contribución alternativa mínima (CAM). Si tu negocio incurre en gastos de publicidad, seguros, telecomunicaciones, internet o televisión por cable, este formulario es esencial para asegurar tu deducción de gastos de tu industria o negocio. Reglas clave para la radicación 🗓 Fecha límite de presentación: Las informativas deben presentarse electrónicamente a través de SURI. Los contribuyentes deben recibir su copia dentro de los 7 días posteriores a la radicación. 📢 ¡No le pagues demás a Hacienda! La falta de radicación de 480s puede afectar tus deducciones. El 28 de febrero está a menos de 2 semanas. Asegúrate de tener el nombre legal, dirección y EIN/SSN de tus suplidores y proveedores de servicios, información que puedes obtener a través de un W-9 o W-8BEN-E (sí, son formularios de EE.UU., pero se utilizan en PR ya que el EIN y el SSN son emitidos a nivel federal). Si no lo tienes hay tiempo, escribe y solicita esta información de tus suplidores y proveedores de servicios. ¡No dejes dinero en la mesa! Siguenos para más contenido sobre cumplimiento con las leyes de Puerto Rico y como operar tu negocio eficientemente.
Puerto Rico’s Investor Tax Incentives: Are You Leaving Money on the Table?
Did you know that Puerto Rico offers some of the most attractive tax incentives in the world? If you’re a business owner or investor, you could be saving thousands—maybe even millions—in taxes! How Act 60 Benefits Investors Puerto Rico’s Incentives Code (Act 60-2019, as amended) grants a tax decree to individual resident investors who meet specific criteria. This decree allows eligible individuals to PAY ZERO TAXES on interest, dividends, and capital gains. To qualify, you must become a bona fide resident. This incentive became especially popular in the crypto and investment communities since it covers gains from stocks, commodities, digital assets, and blockchain-based holdings. But you have to hurry, as these incentives all end in 2036. Additionally, individuals can pair this with an operating business in Puerto Rico, which may qualify for a 15-year tax decree at just 4% corporate income tax. Some industries even benefit from tax rates between 0% and 10%, depending on their economic activity. While business incentives come with technical requirements (which we’ll cover in a future post), today’s focus is on individual resident investors and their residency qualifications. Key Requirements for the Individual Resident Investor Decree If you want to retain your tax benefits, you must meet strict requirements: Residency – You (and your family) must establish Puerto Rico as your primary residence. You must have not lived in Puerto Rico between January 17, 2006 and January 17, 2012. Real Estate – Within two years of obtaining your decree, you must purchase a home in Puerto Rico that is exclusively owned by you and/or your spouse. Charitable Contribution – A $10,000 annual donation to a Puerto Rico-based nonprofit is mandatory. Annual Report – You must file an annual report with the Department of Economic Development and Commerce (DEDC), which costs $5,005. Please note that Act 22 and Act 60 have grandfathered clauses, meaning some people with Act 22 decrees do not have to buy a house and only pay $5,000 to charity. Since it is a contract between you and the government, you have constitutional protection that no future law can amend to impair your contract. However, if Act 60 is amended with better benefits, you can request your decree be amended to benefit from the better terms. ⚠️ Failure to comply with these requirements can lead to disqualification, revocation, and back taxes.While the housing requirement is non-negotiable (if not met, your decree is automatically revoked), other failures—like missing your donation or annual report—can sometimes be corrected by paying late fees, amending your decree and requesting clemency from the DEDC. Residency: What You Think You Know is Wrong Most people assume they need to spend at least 183 days per year in Puerto Rico to qualify as a resident. But that’s only partially true. 🛑 The 183-day rule is just a presumption—not a requirement. 📌 The Puerto Rico Internal Revenue Code (PRIRC) states that spending 183 days physically in Puerto Rico automatically establishes residency. However, not meeting this threshold does NOT mean you are automatically a non-resident. Instead, if you spend less than 183 days in Puerto Rico, you must prove your residency using facts and circumstances under Puerto Rico’s domicile test. How to Prove Puerto Rico Domicile Under the PRIRC, a resident individual is someone domiciled in Puerto Rico. But what does that mean? Your domicile is the place where you habitually reside when not away for work or other temporary reasons. You can only have ONE domicile at a time—if you want it to be in Puerto Rico, you must take intentional actions to establish it. You must demonstrate Puerto Rico is your “home base,” meaning it’s the place you return to during “seasons of repose.” On top of this, the IRS applies its own three-part test to determine if someone is a bona fide Puerto Rico resident: Presence Test – Being physically present in Puerto Rico for 183 days OR showing a “significant connection” to the island. The Internal Revenue Service (“IRS”) in Publication 570 establishes other ways to meet the Presence Test, which are outside the scope of this article, but you can check it out. Tax Home Test – Proving your primary place of business or employment is in Puerto Rico. Closer Connection Test – Demonstrating that your strongest ties (family, home, voting registration, community, mail, assets, etc.) are in Puerto Rico rather than the U.S. 🚨 Example: The IRS once ruled that a taxpayer who moved to Puerto Rico to start a business but whose spouse and children stayed in California was not a bona fide Puerto Rico resident. Despite owning a home in Puerto Rico, the taxpayer frequently traveled to the U.S. for business, family visits, and vacations. Because of his closer connections to the U.S., he failed the residency test. The Bottom Line: Residency is Fact-Specific Puerto Rico has incredible incentives but you have to comply with the rule to avail yourself of them. The key takeaway? Puerto Rico residency isn’t as simple as counting days. It depends on your lifestyle, economic ties, and personal connections. If you’re considering relocating or need help optimizing your tax structure, consult a professional. Every case is different, and the consequences of getting it wrong can be costly. 💬 Thinking about moving your business to Puerto Rico? Not sure if you would qualify as a resident?📩 Let’s talk! Schedule a consultation today and ensure you don’t leave money on the table. Legal Disclaimer This post is for informational purposes only and does not constitute legal advice. You should consult with legal counsel before making any decisions regarding residency, taxation, or business incentives. Accessing this post does not create an attorney-client relationship.
