2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1004 - Tax Rates (§§ 30061 — 30090) › Subchapter C - Preferred Rate Taxes (§§ 30081 — 30090) › § 30090 - Imposition of surtax on gross income

(a) Applicable tax.—
(1) General rule.—
(A) In the case of any corporation engaged in trade or business in Puerto Rico, except for financial institutions as defined in this section and entities subject to Section 1123(f) of the Puerto Rico Internal Revenue Code of 1994, there shall be imposed, collected, and paid, for each taxable year, a surtax on its gross income, as defined in subsection (e) of this section, which shall be determined by applying the rates established below and shall only be part of the computation of the tax imposed under subsection (a) of § 30073 of this title:
If the gross income is: The rate shall be: From $1,000,000, but not over $3,000,000.20% In excess of $3,000,000, but not over $300,000,000.50% In excess of $300,000,000, but not over $600,000,000.70% In excess of $600,000,000, but not over $1,500,000,000.80% In excess of $1,500,000,000.85%
(B) In the case of an entity that pays taxes as a partnership, special partnership, and corporation of individuals, except for a financial institution, as defined in this section, there shall be imposed, collected, and paid, for any taxable year, a surtax on its gross income, as defined in subsection (e) of this section, which shall be determined by applying the rates established below and shall only be part of the computation of the tax imposed under subsection (a) of § 30062 of this title or subsection (a) of § 30073 of this title:
If the gross income is: The rate shall be: From $1,000,000, but not over $3,000,000.20% In excess of $3,000,000, but not over $300,000,000.50% In excess of $300,000,000, but not over $600,000,000.70% In excess of $600,000,000, but not over $1,500,000,000.80% In excess of $1,500,000,000.85%
(2) Finance business.—
(A) Tax.— In the case of any financial institution, as defined in this section, there shall be imposed, collected, and paid, for any taxable year, a one percent (1%)-surtax on its gross income.
(B) Credit for special tax on gross income paid.— Any financial institution engaged in trade or business in Puerto Rico may credit against the income tax or alternative minimum tax payable for the corresponding taxable year, if any, determined for the corresponding taxable year (including the tax determined under the provisions of the Internal Revenue Code of 1994, as amended, in accordance with § 30076 of this title), subject to the limitations set forth below, an amount equal to point five percent (0.5%) of its gross income for the corresponding taxable year.
Any amount of the credit available under this section for any taxable year that has not been used due to the limitations set forth herein shall not be reimbursed and shall only be available to be used in future taxable years subject to the provisions of this paragraph.
(3) Exception.— The provisions of this section shall not apply to:
(A) A person operating under the provisions of §§ 30641 et seq. of this title, known as the “Economic Incentives Act for the Development of Puerto Rico,” or any previous or subsequent similar law, or under the provisions of §§ 6341 et seq. of this title,, known as the “Puerto Rico Tourism Development Act of 2010’; §§ 10421 et seq. of this title, §§ 30831 et seq. of this title,, or any previous or subsequent similar law granting a tax exemption with respect to income derived from operations, covered under a tax exemption decree, resolution or grant conferred under said laws;
(B) A person operating a bona fide agricultural business to the extent the income derived from such activity is allowed as a deduction under the provisions of § 30132 of this title or is covered under the provisions of §§ 10401 et seq. of this title, known as the “Agricultural Tax Incentives Act of Puerto Rico; and
(C) A nonprofit entity listed in § 30471 of this title.
(D) The premiums earned from Medicare Advantage, Medicaid, Mi Salud, Inc., and annuities.
(4) Dispensation.— The Secretary may reduce, under the rules and regulations promulgated by him/her, the applicable tax rate, but never below point two percent (.2%), to any taxpayer to whom the tax imposed under this Section applies, except for financial institutions (as defined herein). The taxpayer shall establish to the satisfaction of the Secretary, or as determined by the Secretary him/herself, that the tax imposed under this Section would impose an undue financial hardship or be prejudicial to the taxpayer, given that such tax represents a significant amount if compared to the its gross margin, as such term is defined herein. In order for the taxpayer’s request to be evaluated, he/she must file the agreed-upon procedures prepared by a certified public accountant who holds a license in effect in Puerto Rico and is enrolled in a peer review program.
(b) The tax imposed under this section shall be part of the income tax corresponding to the taxable year, including the tax determined in accordance with §§ 30064 and 30076 of this title, and shall also include:
(1) The estimated tax payment requirement established in §§ 30260, 30261 and 30263 of this title or under the corresponding provisions of the Internal Revenue Code of 1994, as amended, to the extent applicable to persons who elected to file under §§ 30064 and 30076 of this title, or
(2) the estimated income tax payment requirement attributable to the distributive share of a partner in a special partnership as required under Section 1062.04, of a partner in a partnership as required under Section 1062.07 or the proportional share of income in a corporation of individuals as required in Section 1062.05, or under the applicable provisions of the Internal Revenue Code of 1994, as amended, and the same shall be reported and paid in full not later than the due date fixed to file the income tax return for the taxable year.
(c) Rules applicable to controlled groups of corporations or affiliated group.—
(1) General rule.— In the case of a controlled group of corporations under § 30044 of this title, or affiliated group under § 30044 of this title, for purposes of determining the rate of the surtax on the gross income applicable to each one of the corporations members of such group, the total amount of the gross income of each one of the persons member of a controlled group of corporations or affiliated group that is required to pay the tax imposed under this section, shall be taken into account.
(2) Exception.— In the event that a controlled group or affiliated group includes one or more financial institutions, such institutions shall be excluded for the aforementioned purposes and the tax imposed under this section shall be determined separately for each one of them.
(d) Credit for special tax on gross income paid.— Any financial institution engaged in trade or business in Puerto Rico may credit against the income tax or alternative minimum tax payable for the corresponding taxable year, if any, determined for the corresponding taxable year (including the tax determined under the provisions of the Internal Revenue Code of 1994, as amended, in accordance with §§ 30064 and 30076 of this title), subject to the limitations set forth below, an amount equal to point five percent (0.5%) of its gross income for the corresponding taxable year.
(1) Limitations.—
(A) Use.— The credit determined as provided above may be used:
(i) Entities filing as a corporation.— Against the income tax or alternative minimum tax payable for the corresponding taxable year, if any,
(ii) Individuals.— Against the income tax or the alternate basic tax payable, if any.
(B) Carryover.— Any amount of the credit available under this section, for any taxable year, that has not been used due to the limitations set forth herein, shall not be reimbursed and shall only be available to be used in future taxable years subject to the provisions of this paragraph.
(e) Definitions.— For purposes of the tax imposed under this section, the following terms shall have the meaning stated below:
(1) Gross income.—
(A) Insurance companies.— Gross income in the case of insurance companies shall be the following:
(i) Life insurance companies.— Gross income in the case of life insurance companies shall be that determined as provided in § 30502 of this title,
(ii) Insurance companies other than life or mutual insurance companies.— Gross income in the case of insurance companies other than life or mutual insurance companies shall be that determined as provided in clauses (1), (3), (4) of subsection (c) of § 30507 and § 30510, both of this title, and
(iii) Mutual insurance companies other than life insurance companies.— Gross income in the case of mutual insurance companies other than life insurance companies shall be that determined as provided in § 30511 of this title.
(B) Gas stations.— In the case of persons engaged in the operations of gas stations, gross income shall be the number of gallons of gasoline (including diesel) sold, multiplied by the maximum gross profit allowed by law, plus the volume of sale of other products and services.
(C) Brokers, dealers, representative agents, advertising agencies, and contractors.— In the case of brokers, dealers, representative agents, and advertising agencies, gross income shall be understood as the gross commissions amount, without deducting any cost item. In the case of contractors, even though they have a cost plus contract, gross income shall be the gross contract amount without deducting any cost item, except the cost of machinery and equipment that the contractor is required to acquire to be permanently incorporated into the project that does not constitute a volume of business factor for the contractor, without including in this exception materials, home appliances, or equipment that generally is part of the construction project.
(D) Distributors and dealers of new automobiles for sale.— In the case of distributors and dealers engaged in the sale of automobiles (as such term is defined in § 31628(b)(1) of this title), gross income shall be understood as that established in § 30101 of this title, minus the gross income exceptions provided in § 30102 of this title. Provided, however, That the total amount generated from the sale of such new automobiles for sale shall be determine without deducting the cost thereof, but deducting from the gross amount the excise taxes paid for new automobiles sold during the taxable year.
(E) Other taxpayers.— In the case of any other taxpayer other than an insurance company, gas station, broker, dealer, representative agent, advertising agency, and contractor, gross income shall be that established in § 30101 of this title, minus the gross income exceptions provided in § 30102 of this title. Provided, That in the case of earnings or income derived from the production or sale of property in the ordinary course of business, whether personal or real property, gross income shall be that generated from the sale of property or goods without deducting the cost of the property or goods sold. The Secretary of the Treasury is hereby authorized to modify the computation of the gross income of a finance business for purposes of this section.
(2) Gross margin.— Means net sales minus cost of goods sold.
(3) Finance business.— Means any trade or business consisting of services rendered or transactions carried out by commercial banks, savings and loans associations, mutual or savings banks, financing companies, investment companies, brokerage firms, collection agencies, and any other activity similar to the aforementioned, carried out by any trade or business. The term “finance business” shall not include activities related to the investment made by persons of their own funds, if such investment does not constitute the principal business activity.
(4) Non finance business.— Means any trade or business other than a finance business, as defined above.
History —Jan. 31, 2011, No. 1, added as § 1023.10 on June 30, 2013, No. 40, § 15.