reglab/statecodes huggingface dataset:
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10835 - Deductions

(a) Deduction and net operating loss carryover.— Distributions described in subsection (a) of this section shall be excluded from:
(1) Deduction for ongoing loss incurred in activities not covered by a decree.— If an eligible business that holds a decree granted under this chapter incurs in net operational losses not attributable to the operation covered by the decree, the same shall not be used against income from operations covered by a decree under this chapter and shall be governed by the provisions of the Code.
(2) Deduction for ongoing loss incurred in the operation of the eligible business.— If an eligible business that holds a decree granted under this chapter incurs in net operational losses covered by the decree, the same shall only be used against other income from operations covered by a decree under this chapter.
(3) Deduction for loss carried over from previous years.— A deduction for loss incurred in previous years shall be granted as provided below:
(A) The excess over losses deductible under subsection (a)(2) of this section shall be carried over against income from the export of services of subsequent taxable years. The losses shall be carried over in the order in which they were incurred.
(B) Once the term of the decree has expired for the purposes of income tax, net losses incurred in the operation covered by the decree, as well as any excess of the deduction allowed under subsection (a)(2) of this section that the eligible business is carrying over as of the date of expiration of said term, may be deducted against any taxable income in Puerto Rico, subject to the limitations provided in Subtitle A of the Code. Said losses shall be deemed as incurred in the last taxable year in which the eligible business that holds a decree under this chapter enjoyed the rate established in § 10832 of this title, in accordance with the terms of the decree.
(C) The amount of net operational loss to be carried over shall be calculated pursuant to the provisions of § 30134 if tis title.
History —Jan. 17, 2012, No. 20, § 7;, renumbered as § 8 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10836 - Tax exemption periods

(a) Exemption.— An eligible business that holds a decree under this chapter shall enjoy the benefits of this chapter for a period of twenty (20) years.
(b) Fixing of the dates of the beginning of operations and of exemption periods.— An eligible business that holds a decree under this chapter shall enjoy the benefits of this chapter for a period of twenty (20) years.
(1) For purposes of § 10832 of this title, the date of the beginning of operations shall be the date in which the eligible business begins conducting the activities covered by the decree, but it shall never be before the date in which an application to avail itself of the benefits of this chapter is duly filed.
(2) For purposes of § 10833 of this title, the date of the beginning of operations shall be January 1 of the year in which the eligible business begins conducting the activities covered by the decree, but it shall never be before January 1 of the year in which an application to avail itself of the benefits of this chapter is duly filed.
(3) In the case of eligible businesses that hold a decree granted under this chapter and which were in operation before applying to avail itself of the benefits of this chapter, the date of the beginning of operations related to the activities covered by the decree shall be the date in which an application is filed with the Exemption Office.
(c) Extension of the decree.— Any eligible business that throughout all its exemption period has met the requirements related to employment, income, investment, or other factors or conditions set forth in the decree, and which proves to the Secretary that the extension of its decree shall be in the best economic and social interest of the People of Puerto Rico, may request to the Secretary an extension of its decree for another ten (10) years, for a total of thirty (30) years. During such extension, the eligible business shall enjoy a fixed income tax rate of four percent (4%).
(1) An application for extension shall be filed with the Secretary not more than twenty four (24) months nor less than six (6) months before the expiration of the decree, and shall include the information required by the Secretary for such purposes through regulations, circular letter, or administrative determination.
(2) Any eligible business described in § 10833(a) of this title shall, during the term of the extension(s), enjoy a fifty percent (50%) exemption on the corresponding taxes on personal and real property used in the activities covered by the decree.
History —Jan. 17, 2012, No. 20, § 8;, renumbered as § 9 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10838 - Nature of the decrees

(a) In general.— Decrees granted under this chapter shall be deemed as contracts between the eligible business, its shareholders, partners, or owners and the Government of Puerto Rico, and said contract shall be the law binding for both parties. Such contract shall be liberally interpreted, in harmony with the purpose of this chapter to promote the socioeconomic development of Puerto Rico. The Secretary shall have discretion to include, in representation of the Government of Puerto Rico, those terms and conditions that are consistent with the purposes of this chapter and that promote the socioeconomic development of Puerto Rico, taking into consideration the nature of the requested petition or action and the related facts and circumstances of each particular case that may be applicable.
(b) Obligation to comply with that stated in the application.— Any eligible business that holds a decree granted under this chapter shall substantially carry out the operations stated in the application, except when the same have been altered through amendments that the Secretary has authorized, at the petitioner’s request, pursuant to the provisions of this chapter.
(c) Administrative decisions; purpose.—
(1) All decisions and determinations of the Secretary under this chapter regarding the granting of a decree and the content thereof shall be final, and no judicial or administrative review or any recourse shall apply, unless specifically provided otherwise. Once a decree is granted under this chapter, no agency, public instrumentality, political subdivision, public corporation, or municipality of the Government of Puerto Rico, except for the Secretary and the Governor, may challenge the legality of such decree or any of its provisions.
(2) Any concessionaire who is adversely affected or aggrieved by any action taken by the Secretary to revoke or cancel an exemption decree according to § 10837(d)(2) of this title shall be entitled to a judicial review of the same by filing a petition for review before the Court of Appeals of Puerto Rico within thirty (30) days after the final decision or adjudication of the Secretary.
(3) Any decision or ruling of the Court of Appeals of Puerto Rico shall be subject to review by the Supreme Court of Puerto Rico through certiorari requested by any of the parties as provided by law.
History —Jan. 17, 2012, No. 20, § 10;, renumbered as § 11 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10841 - Special Fund for the Development of Services for Export and Promotion (§ 10841) › 1

In General.— The Secretary of the Treasury shall establish a special fund, known as the “Special Fund for the Development and Promotion of Export Services” (“Special Fund”). During the effective term of this act, ten percent (10%) of the revenues arising from the income tax paid by eligible businesses that hold a decree under this chapter shall be deposited in said fund. The Special Fund for Economic Development of Act No. 73-2008 shall contribute the sum of five (5) million for the fiscal year in which this Act is approved, and five (5) million for the following fiscal year.
The monies in the Special Fund established herein shall be managed by the Secretary and shall be used exclusively for the following purposes:
(a) Provide special incentives to encourage and promote investment and training of eligible businesses.
(b) Provide special incentives that facilitate the establishment of new businesses in Puerto Rico.
(c) Provide special incentives to promoters, in lieu of or in addition to the benefits of a decree under this chapter.
(d) Provide special incentives for education and training in areas related to services for exportation.
(e) Hire professionals from the private sector to help the Secretary comply with his/her duty to promote this chapter or any other act related to economic development as determined by the Secretary through regulations.
(f) Defray the administrative expenses related to the inspections and audits of this program. This shall include trainings, equipment and the hiring of trained personnel to ensure compliance with this chapter.
(g) Defray expenses associated with campaigns to promote, in the United States and internationally, the incentives and activities of the Puerto Rico International Insurance Center, created under §§4301 et seq. of Title 26, and the International Banking Center, created under § 3081 et seq. of Title 7, known as the “International Banking Center Regulatory Act”.
The Secretary, with the advice of the Executive Director, shall establish through regulations the terms, conditions, eligibility, and criteria to be used in the disbursement of money from the Special Fund. The disbursement of money from the Special Fund shall be subject to the approval of the Executive Director and its Board of Directors.
Notice This section has more than one version with varying effective dates. First of two versions of this section.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10842 - Regulations under this chapter

Within ninety (90) days after this act takes effect, the Secretary shall, with the advice of the Executive Director and the Secretary of the Treasury, draft the regulations needed to enforce the provisions and purposes of this chapter. Said regulations shall also be subject to the provisions of §§ 2101 et seq. of Title 3, known as the “Commonwealth of Puerto Rico Uniform Administrative Procedures Act”.
History —Jan. 17, 2012, No. 20, § 14; renumbered as § 15 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10843 - Decrees granted under Industrial or Tax Incentives Laws

(a) The Tax Exemption Office shall not accept new exemption applications from businesses under § 10642(d)(1)(D)(i) of this title, as of the date of effectiveness of this act. Therefore, all decree applications filed as of the date of effectiveness of this act regarding an eligible service shall be governed by the provisions of this chapter. New decree applications for eligible services filed before its effective date, but which have not been granted as of the effective date of this act, may be processed under this chapter, at the option of the applicant, provided the services are considered eligible. Decrees granted under Act No. 173-2008 or similar previous acts shall remain in effect in terms of their respective provisions.
(b) Any natural or juridical person that provides or proposes to provide an eligible service or promoter services, shall be able to apply for a decree in accordance with this chapter regardless of the expected volume of such services.
History —Jan. 17, 2012, No. 20, § 15; renumbered as § 16 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 983 - Act to Promote the Export of Services (§§ 10831 — 10844) › § 10844 - Application of the Code for a New Puerto Rico

The Code shall apply as a supplement to this chapter, provided that its provisions do not contravene the provisions of this chapter.
History —Jan. 17, 2012, No. 20, § 16; renumbered as § 17 on July 11, 2012, No. 138, § 6.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10851 - Definitions

(a) Resident individual investor.— Means a resident individual, as defined in § 30041(a)(3) of this title, who has not been a resident of Puerto Rico during the fifteen (15) years preceding the effective date of this act and becomes a resident of Puerto Rico not later than the tax year ending on December 31st, 2035. According to the definition of the term resident individual provided in § 30041(a)(3) of this title, students pursuing an education outside of Puerto Rico who were residents of Puerto Rico prior to leaving to study abroad, personnel working outside of Puerto Rico on a temporary basis for the Government of Puerto Rico, its agencies and instrumentalities, and persons in situations similar to those described above, shall not be eligible to be considered as resident individual investors, since they continue to be domiciled in Puerto Rico for the period they reside outside of our jurisdiction.
(b) Code.— Means §§ 30011 et seq. of this title, known as the “Internal Revenue Code for a New Puerto Rico”, or any other succeeding law that substitutes it.
(c) Banking Center Act.— Means §§ 232 et seq. of Title 7, known as the “International Banking Center Regulatory Act”.
History —Jan. 17, 2012, No. 22, § 2.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10852 - Tax exemption applicable to income derived from interest and dividends earned by a resident individual investor

Income derived from all sources by a resident individual investor after becoming a resident of Puerto Rico, but before January 1st, 2036, consisting of interest and dividends, including but not limited to interest and dividends from a registered investment company described in § 30521 of this title, shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Code. In addition, the income derived by a resident individual investor after becoming a resident of Puerto Rico, but before January 1st, 2036, consisting of interest, financing charges, dividends or partnership interest received from international banking institutions duly authorized under the Banking Center Act shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Code.
History —Jan. 17, 2012, No. 22, § 3, renumbered as § 4 on July 11, 2012, No. 138, § 2.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10853 - Special tax for resident individual investors on net long-term capital gain

(a) Appreciation before becoming a resident of Puerto Rico.— The total net long-term capital gain generated by a resident individual investor related to the appreciation of the securities owned by such resident individual investor before becoming a resident of Puerto Rico, which appreciation is recognized ten (10) years after he/she became a resident of Puerto Rico and before January 1st, 2036, shall be subject to a five percent (5%) tax, in lieu of any other tax imposed under the Code. If such appreciation is recognized at any other time, the net long-term capital gain with respect to said securities shall be subject to the payment of income taxes in accordance with the tax treatment provided by the Code. The amount of the net long-term capital gain shall be limited to the portion of the gain related to the appreciation of the securities while the resident individual investor resided outside of Puerto Rico.
(b) Appreciation after becoming a resident of Puerto Rico.— The total net capital gain generated by a resident individual investor related to any appreciation of securities after said resident individual investor becomes a resident of Puerto Rico that is recognized before January 1st, 2036, shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Code. If such appreciation is recognized after December 31st, 2035, the net capital gain with respect to said securities shall be subject to income taxes in accordance with the tax treatment provided by the Code. The amount of this net capital gain means the portion of the gain related to the appreciation of both the securities owned by the resident individual investor at the time of becoming a resident of Puerto Rico and those acquired by him/her after becoming a resident of Puerto Rico.
History —Jan. 17, 2012, No. 22, § 4, renumbered as § 5 and amended on July 11, 2012, No. 138, §§ 2, 3.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10854 - Report required to resident individual investors

Any resident individual investor who holds a decree issued under this chapter shall file annually an authenticated report with the Exemption Office and a copy thereof with the Secretary of the Treasury thirty (30) days after filing the income tax return with the Department of the Treasury, including any extension thereof. The Executive Director of the Exemption Office may grant a thirty (30)-day extension if so requested in writing before the term to file the Report expires; provided, that there is just cause therefor and it is so stated in the request. Said report shall include a relation of data showing compliance with the conditions under the decree for the taxable year immediately preceding the filing date, his name and the name of related business, the cadaster number of the property or properties connected to the incentivized activity; the merchant registration number; the related account as required in the Puerto Rico Internal Revenue Code; the employer identification number; and the information required by §§ 1141 et seq. of Title 23, better known as the “Fiscal Information and Permit Control Act”, as applicable, as well as any other information required by regulations, including the payment of annual fees. Fees shall be paid in the manner prescribed by the Secretary through regulations. The information provided in said annual report shall be used for statistical purposes and economic analyses. Likewise, the Exemption Office shall conduct an audit annually to ascertain compliance with the terms and conditions of the decree issued under this chapter
History —Jan. 17, 2012, No. 22, § 5, renumbered as § 6 on July 11, 2012, No. 138, § 2; Dec. 22, 2014, No. 241, § 3; Nov. 17, 2015, No. 187, § 107; Nov. 20, 2015, No. 191, § 1.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10854b - Fees

In addition to the fees established for the transactions established in § 10851a of this title, every grantee shall pay to the Secretary, by means of internal revenue stamps in any Internal Revenue Collections Center of the Department of the Treasury, certified check or postal money order, fees equal to five thousand ($5,000) dollars. The Secretary of the Treasury shall create a special fund, denominated as the “Special Fund under the Act to Promote the Relocation of Individual Investors to Puerto Rico”, where all the funds generated as a result of the fees collected under this chapter shall be deposited. The Secretary shall administer such funds as an independent treasury and shall use such funds to defray any expenses incurred in the promotion, administration, and implementation of this Act. The Secretary may also use such funds to promote the relocation of individual investors to Puerto Rico. The Secretary shall require grantees one hundred percent (100%) of said fees upon issuance of the decree.
History —Jan. 17, 2012, No. 22, added as § 8 on Dec. 22, 2014, No. 241, § 6; Nov. 20, 2015, No. 191, § 2.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 984 - Act to Promote the Relocation of Individual Investors to Puerto Rico (§§ 10851 — 10855) › § 10855 - Rulemaking authority

The Secretary of the Treasury shall prescribe by regulations, circular letter, or administrative determination the guidelines for the interpretation and implementation of the provisions of this chapter. Any regulatory provisions that are amended or adopted in accordance with this chapter shall not be subject to the applicable provisions of the Uniform Administrative Procedure Act, §§ 2101 et seq. of Title 3.
History —Jan. 17, 2012, No. 22, § 6, renumbered as § 7 on July 11, 2012, No. 138, § 2.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 16 - Payment of Debts (§§ 20001 — 20005) › Chapter 991 - Payment of Debts with Credit Cards (§§ 20001 — 20005) › § 20001 - Definitions

For the purposes of this chapter, the following words or terms shall have the meaning stated herein below:
(a) Credit card. — Means any instrument or object known as a credit card, plate, book of coupons or by any other name, issued upon payment or non-payment of a fee by the person to whom it is issued, to be used by the holder to obtain cash advances or to acquire on credit money, goods, services or any other thing of value or credit, or to pay loans or debts in the establishment of the entity which issues the credit card, or at any other government establishment, agency or instrumentality, the Courts Administration or a municipality.
(b) Holder. — Means any person who has obtained one or several credit cards and in whose name the account to be charged for the use of the card, appears.
(c) Issuer. — Means any banking or financial institution which issues credit cards [on] behalf of a holder.
(d) Banking institution. — Means any local or foreign bank doing business in Puerto Rico, pursuant to the provisions of the Banking Law of Puerto Rico.
(e) Financial institution. — Means any person engaged in issuing credit cards, among other activities.
(f) Person. — Means a natural or juridical person.
(g) Illegal use of credit cards. — Means the use of a credit card which does not legitimately belong to the person who [is] using said card, for the purpose of defrauding the government to obtain government goods and services, or to pay loans, government debts and others, knowingly or with probable cause to believe that:
(1) The card is stolen or forged;
(2) the card has been revoked or canceled, and
(3) the use of the credit card has not been authorized for some reason.
History —Aug. 11, 1995, No. 155, § 1, eff. 120 days after Aug. 11, 1995.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 16 - Payment of Debts (§§ 20001 — 20005) › Chapter 991 - Payment of Debts with Credit Cards (§§ 20001 — 20005) › § 20002 - Receiving payment with credit card

All government agencies and instrumentalities, the Courts Administration and the municipalities which offer services, receive payments or collect debts on account of loans, taxes, licenses, patents, excise taxes, fines, penalties, surcharges and interest and others, are hereby authorized to receive payments chargeable to a credit card which has been issued by the issuer [on] behalf of the holder and which is accepted by him/her.
History —Aug. 11, 1995, No. 155, § 2, eff. 120 days after Aug. 11, 1995.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 16 - Payment of Debts (§§ 20001 — 20005) › Chapter 991 - Payment of Debts with Credit Cards (§§ 20001 — 20005) › § 20003 - Penalties for illegal use

Any person who makes illegal use of a credit card shall, for the purposes of this chapter, incurs a felony and shall be sanctioned according to the penalty provided in § 4556 of Title 33.
History —Aug. 11, 1995, No. 155, § 3, eff. 120 days after Aug. 11, 1995.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 16 - Payment of Debts (§§ 20001 — 20005) › Chapter 991 - Payment of Debts with Credit Cards (§§ 20001 — 20005) › § 20004 - Obligation to pay debt

Acceptance of a credit card as a means of payment, pursuant to the provisions of this chapter, shall not exempt the debtor from his/her obligation to pay the debt contracted until the same has been paid in full or extinguished by the card issuer as defined in the preceding § 20001 of this title.
History —Aug. 11, 1995, No. 155, § 4.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 16 - Payment of Debts (§§ 20001 — 20005) › Chapter 991 - Payment of Debts with Credit Cards (§§ 20001 — 20005) › § 20005 - Regulations

The Department of the Treasury shall draft the regulations needed to implement this chapter. The Secretary of the Treasury shall draft the regulations for the agencies whose funds are in custody of the Department of the Treasury, and for the [payment of] taxes. Every matter concerning the manner in which the banking and financial institutions shall be compensated shall be included in the regulations.
History —Aug. 11, 1995, No. 155, § 5, eff. 120 days after Aug. 11, 1995.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART A - Enabling Tax Reform (§§ 30001 — 30004) › Chapter 1000 - Enabling Act (§§ 30001 — 30004) › § 30001 - Public policy

The realities of the new century, the needs of the people of Puerto Rico and the evolution of a more competitive global economy call for a fair tax system. At present, a considerable number of taxpayers evade the responsibility to share in the financing of the operations of the Commonwealth of Puerto Rico. In addition, the system is complex, among other things, because of the many incentives and deductions that make tax evasion possible, thus reducing the efficiency of tax collections. In view of this situation, it is imperative to respond to the claim for the Government of the Commonwealth of Puerto Rico to implement a tax system that is fair, equitable, relatively simple and efficient in collections, and which stimulates the development of our economy.
The basic principles that should govern the Tax Reform to be conducted are:
(1) The tax system should be designed to reward employment and not to penalize work. It should be a system that does not burden the labor force unfairly.
(2) The tax system should be equitable, directed toward the expansion of the tax base, so that more Puerto Ricans contribute less, achieving an effective fight against tax evasion and reducing [the] underground and informal economy as much as possible.
(3) The tax structure should provide the necessary resources to render services to the people and at the same time remain in harmony with the public policy of incentives for economic development. Tax incentives should be directed toward a single purpose: economic development and the creation of permanent employment.
(4) The tax system should promote savings and grant incentives to local investments, mainly those that stimulate economic development.
(5) The Puerto Rican tax system should be competitive from the global point of view and at the forefront of the challenges entailed by the opening of international markets, including new technology.
History —Sept. 15, 2004, No. 323, § 2.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART A - Enabling Tax Reform (§§ 30001 — 30004) › Chapter 1000 - Enabling Act (§§ 30001 — 30004) › § 30002 - Objectives

The legislation that restructures the tax system should be based on compliance with the following objectives:
(1) Relieve the current tax burden of individual income tax payers, taking as a basis for comparison the tax systems [and] the income and expense structure of the states and other countries.
(2) Propitiate that individuals and corporations contribute to the treasury according to their financial capabilities.
(3) Effective control over tax evasion, and compliance by increasing collections through the expansion of the tax base.
(4) Simplify the tax system and the tax payment procedures.
(5) Temper the tax obligations taking into consideration the financial situation of families below the poverty level established by the federal census.
(6) Establish a tax system that is easy to understand and manage, which expedites its compliance for the taxpayers.
(7) Provide resources for the administration of the programs and services offered by the State.
(8) Promote a self-sustaining economic development that stimulates the economic development of the country.
History —Sept. 15, 2004, No. 323, § 3.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART A - Enabling Tax Reform (§§ 30001 — 30004) › Chapter 1000 - Enabling Act (§§ 30001 — 30004) › § 30003 - Purpose

Based upon the referred [sic] principles and objectives and taking into consideration the results of the studies being performed by the Department of the Treasury, the proposed Tax Reform should:
(1) Significantly reduce tax rates on the income of individuals, particularly of the middle class;
(2) expand the tax base by incorporating the persons or entities operating within the informal or underground economy framework that do not participate in the responsibility of financing public programs and services;
(3) evaluate general excise taxes; shall consider possible alternatives to the same taking into account the basic principles and objectives established in §§ 30001 and 30002 of this title;
(4) and if necessary, implement a reimbursement system for persons of low income, pensioners and those who depend upon state or federal economic assistance, and
(5) establish a simple tax system with a structure for oversight and supervision that is more agile and effective.
History —Sept. 15, 2004, No. 323, § 4.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART A - Enabling Tax Reform (§§ 30001 — 30004) › Chapter 1000 - Enabling Act (§§ 30001 — 30004) › § 30004 - Measures

The Secretary of the Department of the Treasury shall take the necessary measures to conclude the study on the Tax Reform during the course of this year 2004, so that the Tax Reform may be legislated in the year 2005, and implemented for the tax year beginning January 1, 2006.
History —Sept. 15, 2004, No. 323, § 5.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART I - Preliminary Provisions (§§ 30011 — 30022) › Chapter 1001 - General Provisions (§§ 30011 — 30013) › § 30011 - Short title

This subtitle, divided into parts, chapters, subchapters, and sections, shall constitute and be known as the “Internal Revenue Code for a New Puerto Rico,” and also as the “Puerto Rico Internal Revenue Code of 2011”, and shall be cited hereinafter as the “Code”.
History —Jan. 31, 2011, No. 1, § 1000.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 1.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART I - Preliminary Provisions (§§ 30011 — 30022) › Chapter 1001 - General Provisions (§§ 30011 — 30013) › § 30012 - Classification of provisions

The provisions of this Code are hereby classified and designated as:
Taxpayer Bill of Rights
(a) Subtitle A.—Income Taxes
(b) Subtitle B.—Estate and Gift Taxes
(c) Subtitle C.—Excise Taxes
(d) Subtitle D.—Sales and Use Tax
(e) Subtitle E.—Beverages
(f) Subtitle F.—Administrative Provisions, Interest, Penalties, and Additions to Taxes
History —Jan. 31, 2011, No. 1, § 1000.02, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART I - Preliminary Provisions (§§ 30011 — 30022) › Chapter 1001 - General Provisions (§§ 30011 — 30013) › § 30013 - Application of this Code

The provisions establishing the effectiveness and application of this Code are found under § 30011 of this title as various notes.
History —Jan. 31, 2011, No. 1, § 1000.03, retroactive to Jan. 1, 2011.
2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART I - Preliminary Provisions (§§ 30011 — 30022) › Chapter 1002 - Taxpayer Bill of Rights (§§ 30021 — 30022) › § 30022 - Taxpayer’s Rights Protection Office

(a) The Taxpayer’s Rights Protection Office is hereby created within the Department to be charged with addressing the problems and claims of the taxpayer, in addition to other functions set forth in this section. The Office shall be administered by a Director, appointed by the Governor.
The Office shall carry out the following functions:
(1) Oversee compliance with the provisions of the Taxpayer Bill of Rights.
(2) Facilitate matters between the taxpayer and the Department in any complaint related to a violation of any right granted under this Code.
(3) Promote the swift, effective solution of the problems faced by the taxpayer that cannot be resolved through the regular procedures of the Department.
(4) Issue taxpayer assistance orders, motu proprio or at the request of the taxpayer, if it determines that the taxpayer is suffering or is about to suffer a significant hardship as a result of the violation of the provisions contained in the Taxpayer Bill of Rights. The term “significant hardship”, as used in this subsection, shall be understood as a serious privation caused or about to be caused as a result of the improper administration of tax laws and their regulations by the Department. However, a mere economic or personal inconvenience caused to a taxpayer shall not constitute a “significant irreparable hardship”.
(b) The Secretary shall establish through regulations the criteria that shall regulate the [issuance] and processing of taxpayer assistance orders. Noncompliance with a taxpayer assistance order by an official or employee of the Department shall result in a disciplinary action according to the provisions of the Personnel Regulations.
(c) Likewise, the Secretary shall by regulation establish the parameters that shall govern the procedures between the Office and the taxpayers.
(d) The Director shall be responsible for the internal operations of the Office, subject to the norms and regulations established by the Secretary for the operations of the Department.
(e) The budget appropriation of the Department of the Treasury shall include a separate item for the operations of the Office.
History —Jan. 31, 2011, No. 1, § 1001.02, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 2.
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 1003 - Definitions and General Provisions (§§ 30041 — 30045) › § 30042 - Types of taxpayers

(a) The provisions of this part shall apply to each one of the following special types of taxpayers, subject to the additional provisions set forth in this part that apply to each type, as follows:
(1) Individuals, corporations and associations;
(2) partnerships and partners (see §§ 30321 et seq. of this title);
(3) trusts and estates (see §§ 30491 et seq. of this title);
(4) foreign taxpayers (see §§ 30431 et seq. of this title);
(5) nonprofit entities (see §§ 30471 et seq. of this title), and
(6) other special entities (see §§ 30501 et seq. of this title).
In the case of other special entities, the provisions of this part shall be applied as provided in subsection (b) of this section.
(b) For purposes of this section, the term “other special entities” shall include the following:
(1) Insurance companies (see §§ 30501—30512 of this title);
(2) registered investment companies (see § 30521 of this title);
(3) special employee-owned corporations and regular and special members (see §§ 30531—30550 of this title);
(4) special partnerships (see §§ 30551—30578 of this title);
(5) corporations of individuals (see §§ 30581—30590 of this title);
(6) entities holding an exemption decree under special tax incentive laws, (see §§ 30601—30613 of this title); and
(7) claims against transferees and fiduciaries, (see §§ 30621—30622 of this title).
History —Jan. 31, 2011, No. 1, § 1010.02, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 4.
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 1003 - Definitions and General Provisions (§§ 30041 — 30045) › § 30043 - Classification of individual taxpayers—Determination of filing status

(a) In the case of individual taxpayers, for purposes of the provisions of this part, the taxpayer shall be subject to taxation under one of the following categories:
(1) Individual taxpayer. — For purposes of this part, an individual shall be considered an “individual taxpayer” if at the close of his/her taxable year:
(A) Is unmarried, whether because he/she has never been married, he/she is a widower or widow or divorced; or
(B) is married, but before the celebration of the marriage he/she has entered into a prenuptial agreement that expressly provides for the division of assets, or
(C) is married, but separated from his/her spouse. An individual shall be deemed to be separated from his/her spouse if at the close of the taxable year he/she were not living with his/her spouse, and during an uninterrupted period of twelve (12) months including the close date for the taxable year, he/she was not living under the same roof with his/her spouse uninterruptedly for one hundred eighty-three (183) days.
(2) Married individual. — The term “married individual” includes couples that have celebrated their marriage in accordance with the Civil Code of Puerto Rico or who are treated as married couples under the body of laws of Puerto Rico. Those spouses that, before the celebration of their marriage executed a prenuptial agreement, expressly providing that the marital property regime is the full division of assets, shall pay taxes each individually as single taxpayer for purposes of the provisions of this part.
(3) Married individual filing a separate return. — The term “married individual filing a separate return” includes those spouses entitled to file as married individuals as provided in clause (2) of this subsection, who elect to file separate returns. In these cases, spouses shall determine their income as provided in § 30063(a) of this title.
(b) For purposes of determining the personal status of an individual for a taxable year, such determination shall be made at the close of his/her taxable year; Provided, That in the case one of the spouses dies during such taxable year, such determination shall be made as of the date of death.
History —Jan. 31, 2011, No. 1, § 1010.03, retroactive to Jan. 1, 2011.
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 1003 - Definitions and General Provisions (§§ 30041 — 30045) › § 30045 - Affiliated group, related party

(a) An affiliated group.— For purposes of this part an “affiliated group” means:
(1) A controlled group of corporations, as such term is defined in § 30044 of this title, or
(2) one or more chains of corporations connected through stock ownership with a common parent corporation, if:
(A) The parent corporation owns directly stock with at least fifty percent (50%) of the total voting power of the stock of such corporation or stock is owned directly by at least one (1) of the corporations within the group of corporations.
(B) For each of the corporations within the group, other corporation within such group owns fifty percent (50%) or more of the voting stock or the total value of all classes of stock of such corporation.
(b) Related party.— A person shall be considered as a taxpayer’s “related party” if such person is:
(1) A component member of a controlled group of corporations, as such term is defined in § 30044 of this title, except that, for these purposes, subsection (b)(2) of such section shall not be taken into account to exclude corporations described therein; or
(2) a corporation in which the taxpayer owns directly or indirectly fifty percent (50%) or more of the value of the stock of such corporation; or
(3) a corporation that owns directly or indirectly fifty percent (50%) or more of the value of its stock; or
(4) A corporation in which fifty percent (50%) or more of the value of its stocks is owned by a person who also owns, directly or indirectly, fifty percent (50%) or more of the value of the stock of the taxpayer; or
(5) a brother or sister (whether by the whole or half blood), the spouse, ancestor or lineal descendant.
History —Jan. 31, 2011, No. 1, § 1010.05, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 6.
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 A - Individual Tax (§§ 30061 — 30065) › § 30063 - Optional tax computation in the case of married individuals living together and filing a joint return

(a) In the case of married individuals who live together and file a joint return, the tax under §§ 30061 and 30062 of this title shall be, at their option, the sum of the taxes determined individually, in the form provided to such purposes by the Secretary, as follows:
(1) The personal exemption shall be that provided in § 30138(a)(1)(A) of this title;
(2) each spouse shall be entitled to claim fifty percent (50%) of the total sum of the exemption for dependent granted by § 30138(b) of this title;
(3) the gross income of each spouse shall be determined as follows:
(A) The income earned from services rendered shall be that generated by each spouse individually. For purposes of this clause, income for rendered services shall be deemed to be the wages, daily pay, salaries, professional fees, commissions, annuities and pensions incomes, the profit attributable to a trade or business and the income pertaining to distributive shares in partnerships, special partnerships and corporations of individuals, among other, and
(B) the income not covered under paragraph (A) of this clause shall be attributed to each spouse on the basis of fifty percent (50%) of the total;
(4) Deductions allowed under clauses (1) through (4) and (10) of subsection (a) of §§ 30135 of this title shall be attributed to each spouse on a fifty percent (50%) of the total basis.
(5) Deductions allowed under clauses (5), (6), (7), (8), and (9) of subsection (a) of § 30135 of this title shall be granted to the spouse to whom they individually belong, up to the limits and subject to the provisions of such clauses; and
(6) Each spouse shall determine his/her normal tax under § 30061(a) of this title, the gradual adjustment under § 30061(b) of this title and the alternative basic tax as provided in § 30062 of this title as if he/she were a single taxpayer.
History —Jan. 31, 2011, No. 1, § 1021.03, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 9.
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 A - Individual Tax (§§ 30061 — 30065) › § 30065 - Special tax on self-employment income of individuals engaged in trade or business

(a) In addition to any other tax imposed under this Code, there shall be imposed, collected, and paid for any taxable year a special two percent (2%)-tax on the gross income derived by an individual from service rendering, except those services rendered by an employee to his/her employer, or trade or business, when the self-employment gross income of such individual is in excess of two hundred thousand dollars ($200,000), determined as provided in subsection (c) of this section.
(b) For purposes of this section, gross income derived from any trade or business consists of net sales minus the cost of the sales, if any.
(c) In determining the gross income subject to the tax imposed by this section, the gross income derived by the taxpayer from any service rendering business and from any other trade or business carried out by such taxpayer shall be consolidated.
(d) This tax shall apply to individuals that file their tax returns under the provisions of the Internal Revenue Code of 1994, as amended, in accordance with § 30064 of this title.
(e) The tax imposed under this section for any taxable year shall be reported and paid in its entirety by the individual not later than the due date set for filing income tax returns for such taxable year.
(f) The tax imposed under this section shall not be deducted from any income tax of the individual for the corresponding taxable year or be subject to the estimated tax on individuals established in § 30260 of this title.
History —Jan. 31, 2011, No. 1, added as § 1021.05 on June 30, 2013, No. 40, § 10.