2023 Laws of Puerto Rico › TITLE TWENTY-THREE - Public Planning and Development (§§ 1 — 11273) › PART IX - Economic Development II (§§ 11001 — 11273) › Chapter 251 - Puerto Rico Film Industry Economic Incentives Act (§§ 11001 — 11008c) › Subchapter VII - Tax Treatment (§§ 11007 — 11007c) › § 11007b - Special tax rate for above-the-line nonresidents

(a) Imposition of tax— A special twenty percent (20%) tax shall be imposed, collected, and paid, in lieu of any other taxes provided in the Code, on the total amount received by any above-the-line nonresidents, or by a legal entity contracting above-the-line nonresidents to render services in Puerto Rico in connection with a film project, and which constitutes wages, fringe benefits, per diems, or fees. Should this special twenty percent (20%) tax apply to a legal entity contracting the services of above-the-line nonresidents, the portion of the payment received by the legal entity that is subject to this special tax shall not be subject to the special twenty percent (20%) tax when paid by the legal entity to the above-the-line nonresidents.
(b) Requirement to deduct and withhold.— Every person who has control, receipt, custody, disposition or payment of the amounts of compensation described in subsection (a) of this section, shall deduct and withhold said twenty percent (20%) tax and shall pay the amount of said tax thus deducted and withheld at the Internal Revenue Collection Office of Puerto Rico, or deposit it in any of the banking institutions designated as depositaries of public funds that have been authorized by the Secretary of the Treasury to receive said tax. The tax shall be paid or deposited not later than the fifteenth (15th) day of the month following the date on which the payment subject to the twenty percent (20%) withholding imposed by this subsection was made. The amounts subject to the deduction and withholding imposed by this subsection shall not be subject to the provisions of the Code, Section 1147 or 1150, or any subsequent provision similar in nature contained in any other law.
(c) Failure to withhold.— If the withholding agent, in violation of the provisions of subsection (b), fails to withhold the twenty percent (20%) imposed by subsection (a), the amount that should have been deducted and withheld (unless the receiver of the income pays the tax to the Secretary of the Treasury) shall be collected from the withholding agent, following the same procedure that would be used if it were a tax owed by the withholding agent. The person who receives the payment shall be required to pay the tax not withheld through the filing of a return within the term provided by Section 1053 of the Code, or any subsequent provision of a similar nature that substitutes it or is contained in any other law, and the payment of the tax pursuant to the provisions of Section 1056 of the Code, or any subsequent provision of a similar nature that substitutes it or is contained in any other law. Notwithstanding the payment of the tax by the receiver recipient, the withholding agent shall be subject to the penalties provided in subsection (f) of this section.
(d) Tax liability.— Every person who is required to deduct and withhold the twenty percent (20%) tax imposed by this section, shall be liable to the Secretary of the Treasury for the payment of said tax and shall not be liable to any other person whatsoever for the amount of any payment thereof.
(e) Tax return form.— Every person who is required to deduct and withhold the twenty percent (20%) tax imposed by this section shall file a tax return form with regard to the same not later than February 28 of the year following the year in which the payment was made. Said return shall be filed with the Secretary of the Treasury and shall contain such information and be prepared in such form as established by the Secretary of the Treasury through regulations. Every person who files the return required by this subsection shall not be required to file the statement required under subsection (j) of Section 1147 of the Code, or any subsequent provision similar in nature contained in any other law.
(f) Penalty.— For the provisions regarding penalties and additions to the tax, see Section 6060 of Subtitle F of the Code, or any subsequent provision similar in nature contained in any other law.
History —Mar. 4, 2011, No. 27, § 8.3; July 13, 2012, No. 140, § 8; Dec. 21, 2012, No. 304, § 4.