2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART I - Industrial Incentives (§§ 10001 — 10052) › Chapter 904 - Puerto Rico Tax Incentives Act of 1987 (§§ 10038 — 10052) › § 10044 - Exempted businesses—Liquidation

(a) General rule. — If at the time of a total liquidation of an exempted business (hereinafter transferor), said transferor had all or part of its accrued surplus from industrial development income subject to taxation by withholding as provided in § 10042 of this title, if it had distributed the same as dividends on the day before the date of the first distribution under its liquidation plan, there shall be imposed and charged to the person who receives any property, including money (hereinafter transferee), a ten percent (10%) liquidation tax on said accrued surplus, in lieu of any other tax, if any, imposed by law on the transferring of said property in liquidation, whose tax in liquidation shall be paid, informed and remitted to the Secretary of the Treasury by the transferor.
(b) Exceptions. — In case the transferor has complied with any of the terms and conditions provided in § 10042(b) of this title or agrees to comply with subsection (f) of this section with regard to the accrued surplus from industrial development income, the liquidation tax provided in subsection (a) of this section shall be adjusted as set forth in said § 10042(b), in the same manner as if such accrued surplus from industrial development income had been distributed as dividends.
(c) Liquidation of transferors with revoked decrees. — If the exemption of the transferor were revoked prior to the expiration of its decree, the accrued surplus from industrial development income as of the effective date of revocation may be transferred to the transferee at any time thereafter subject to the provisions of subsections (a) and (b) of this section, except in cases of mandatory revocation under § 10046(c)(2) of this title where the accrued surplus from industrial development income shall be taxed as provided in the revocation order.
(d) Liquidations subsequent to expiration of decree. — After the termination of its exemption, the transferor may transfer to the transferee the accrued surplus from industrial development income derived during the effective term of the decree subject to the provisions of subsections (a) and (b) of this section.
(e) Liquidation of decrees with exempt and nonexempt activities. — In the event the transferor conducts exempt and nonexempt activities, it may transfer the accrued surplus from, and the property devoted to industrial development to the transferee as part of its total liquidation subject to the provisions of subsections (a) and (b) of this section. The accrued surplus that is not from industrial development income and the property that is not devoted to industrial development shall be distributed according to §§ 8006 et seq. of this title.
(f) Distributions of certain assets upon liquidation. — In the case of any asset of the transferor whose distribution is considered pursuant to this section, and that cannot be retained by the transferor during the period provided in § 10042(b) of this title so that it may meet the provisions of law of the jurisdiction of the transferee or the transferor, the term provided in said subsection shall be deemed as met for all effects and purposes with all the attributes and rights granted thereby if the transferee or any entity affiliated with it maintains the investment for the remainder of said term.
(g) Regulations. — The Secretary of the Treasury shall establish such regulations as may be needed to implement the provisions of this section.
History —Jan. 24, 1987, No. 8, p. 949, § 6; Oct. 27, 1995, No. 218. § 6; Sept. 12, 1996, No. 212, § 4.