2023 Laws of Puerto Rico › TITLE TWENTY-SEVEN - Public Service (§§ 1 — 2641) › PART V - Regulation of Public Services (§§ 2601 — 2641) › Chapter 91 - Public-Private Partnerships Act (§§ 2601 — 2623) › § 2611 - Tax liability and benefits

(a) Tax liability.— The following kinds of property shall be exempted from any tax on real or personal property levied by the Government, its agencies, public corporations, municipal entity and instrumentalities and any political subdivision thereof for the term and at the percentages established by the Authority under the partnership contract: (i) the facility; (ii) the property used exclusively in or for the facility or for the services or functions that (A) belongs to the partnering government entity and is leased, licensed, financed or otherwise made available to the contractor, (B) is acquired, built or owned by the partnering government entity and is made available to the contractor. The contractors and the municipal governments may establish payment agreements or exemptions for municipal license fees, excise taxes or municipal taxes pursuant to the provisions of §§ 4001 et seq. of Title 21, known as the “Commonwealth of Puerto Rico Autonomous Municipalities Act”. The contractors in a partnership established under this chapter shall be subject to a fixed income tax rate of ten percent (10%) over the net income derived from the operations provided in the partnership contract, calculated in accordance with the Puerto Rico Internal Revenue Code, as of the date of the beginning of the partnership’s operations, in lieu of any other income tax, if any, provided by this Code or by any other act. In the case of corporations or regular partnerships, the distribution of income to the shareholders or partners shall be subject to the tax levied by Section 1012(b) of the Puerto Rico Internal Revenue Code, as amended. It is further clarified that said special rate shall not be applicable nor shall it in any way alter the taxes levied bySections 1221 and 1231 of the Puerto Rico Internal Revenue Code. Neither shall it be subject to the surtax provided in Act No. 7 of March 9, 2009, the “Special Act to Declare a State of Fiscal Emergency and to Establish a Comprehensive Fiscal Stabilization Plan to Salvage the Credit of Puerto Rico”.
The contracting corporations and partnerships may choose to be treated, for tax purposes, pursuant to the provisions of Subchapter K of the Puerto Rico Internal Revenue Code, as amended. In this case, the shareholder of a special Contracting partnership shall be subject to a fixed income tax rate of twenty percent (20%) over the net income derived from the operations provided in the partnership contract. Said tax shall be withheld at source and deposited in the Department of the Treasury of Puerto Rico on or before the fifteenth day of the second month, after the end of the fiscal year of the special partnership. The provisions of Sections 6040 and 6041 of the Puerto Rico Internal Revenue Code, as amended, shall be applicable to the late payment of this tax. The special employee-owned corporations parties to a partnership contract may avail themselves of the benefits provided in Subchapter M of Chapter 3 of Subtitle A of Act No. 120 of October 31, 1994, as amended, better known as the “Puerto Rico Internal Revenue Act of 1994”. The participation of a nonprofit corporation in a partnership contract, regardless of the type of organizational or juridical structure under which it is organized, shall not affect its eligibility for the purpose of availing itself of the benefits of the Puerto Rico Internal Revenue Code provided for the type of particular entity or organization in question.
(b) Tax benefits.— A contractor under a partnership contract may not receive tax benefits provided for under the Economic Incentives Act for the Development of Puerto Rico, §§ 10641 et seq. of Title 13, for the activity covered under such contract.
History —June 8, 2009, No. 29, § 12.