2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 2 - Taxation In General (§§ 161 — 393) › Chapter 45 - Hospital Facilities Tax Exemption (§§ 371 — 378) › § 371 - Hospital facilities, exemptions

Any natural or juridical person who, upon compliance with the formalities of this chapter, engages in the operation of a hospital unit, as said term is hereinafter defined, may enjoy for a period of ten (10) years the following benefits:
(a) A tax credit of up to fifteen percent (15%) of the total eligible payroll expenses which may be used to defray up to fifty percent (50%) of the income tax determined by Subtitle A of Act No. 120 of October 31, 1994, known as the “Puerto Rico Internal Revenue Code of 1994”, on the net income arising from the rendering of medical-hospital services in a hospital unit.
(b) Full exemption from the payment of property taxes or that portion of the property, whether real or personal, provided that said properties are used to render medical-hospital services, belong to a hospital unit and are located within the perimeters of the institution whose area, for the purpose of the exemption granted herein, is limited to a total of ten (10) cuerdas. The exemption on the land area in cases of hospital units under § 375(a)(4) of this title is limited to one (1) cuerda.
(c) Full exemption from the payment of Commonwealth excise taxes on all kinds of equipment, machinery and devices (excluding spare parts and accessories therefor) which are expressly designed for the medical diagnosis and treatment of human diseases and introduced by or consigned to the hospital unit.
(d) Full exemption in the payment of licenses, excise taxes and any other type of municipal taxes; Provided, That no contractor or subcontractor of a natural or juridical person who engages in the operation of a hospital unit shall be subject to any tax, duties, fees, license, excise tax, rate or tariff for the construction of works to be devoted to the operation of any hospital unit within any municipality imposed by any ordinance of any municipality.
Every natural or juridical person engaged in the operation of a hospital unit, who as of January 1, 2005, has availed him/herself of the tax exemption benefits provided in this chapter, may continue to do so for an additional term of ten (10) years once the present exemption concludes. This additional ten (10) year period shall take effect after the date the application to such purpose is filed before the Secretary of the Treasury.
Those natural or juridical persons engaged in the operation of a hospital unit and whose benefits expired prior to January 1, 2005, may avail themselves of the tax exemption benefits for an additional period of ten (10) years, upon filing an application to such effects with the Secretary of the Treasury not later than January 31, 2006, and if all other requirements of this chapter are complied with. This additional ten (10) year period shall take effect for tax year beginning after December 31, 2004.
The ten (10) year period shall only be granted to natural or juridical persons who are up to date in their tax responsibilities imposed by any Commonwealth or municipal ordinance laws, that apply or who are up to date in the tax payment plan of which they have availed themselves of. This exemption shall also be subject to the natural or judicial person’s being up to date in their compliance with their tax responsibilities.
Every natural or juridical person enjoying the benefits of this chapter shall file before the Secretary of the Treasury each year, on or before the last day of his/her taxable year, a certification from the Secretary of Health establishing that the facilities and medical services rendered are of medical excellence. The inspection costs incurred by the Secretary of Health to the effects of issuing the abovestated certificate shall be reimbursed by each entity that availed itself of the benefits of this chapter.
The entities which obtain or have obtained tax exemption under paragraph (4) of Section 1101 of the Puerto Rico Internal Revenue Code of 1994, shall keep the full income tax exemption provided in said section.
(e) Extension of credits and exemptions.—
(1) Extension for 2005: Natural or juridical persons engaged in the operation of a hospital unit that, as of January 1 st , 2005, have availed themselves of the benefits provided in this chapter, may continue to do so for an additional term of ten (10) years once the current exemption ends. This additional ten (10)-year period shall take effect as of the date in which the application for such purposes is filed with the Secretary of the Treasury.
Those natural or juridical persons engaged in the operation of a hospital unit, but whose benefits expired prior to January 1 st, 2005, may avail themselves of the benefits for an additional ten (10) year-period, upon filing an application to such effects with the Secretary of the Treasury not later than January 31 st, 2006, and if all other requirements of this chapter are met. This additional ten (10)-year period shall take effect for the taxable years beginning after December 31 st, 2004.
The ten (10)-year period shall only be granted to natural or juridical persons that are up to date with the tax responsibilities imposed by any applicable law of the Commonwealth of Puerto Rico or municipal ordinance, or that are up to date with the tax payment plan of which they have availed themselves. This extension shall also be contingent on natural or judicial persons being up to date and compliant with their tax responsibilities.
(2) Natural or juridical persons engaged in the operation of a hospital unit that, as of January 1 st, 2015, have availed themselves of the tax exemption benefits provided in this chapter, may continue to do so for an additional term of ten (10) years once the current exemption expires, subject to the provisions of this clause. This additional ten (10)-year period shall take effect as of the date in which the application for such purposes is filed with the Secretary of the Treasury. Those natural or juridical persons engaged in the operation of a hospital unit and whose benefits expired prior to January 1 st, 2015, may avail themselves of the benefits for an additional ten (10)-year period upon filing an application to such effect with the Secretary of the Treasury not later than January 31 st, 2016, and if all other requirements of this chapter are met. This additional ten (10)-year period shall take effect for taxable years beginning after December 31 st, 2014.
In both cases, the ten (10)-year period shall only be granted to natural or juridical persons engaged in the operation of a hospital unit that:
(A) Are up to date with the tax responsibilities imposed by any applicable laws of the Commonwealth of Puerto Rico or municipal ordinances, or who are up to date with the tax payment plan of which they have availed themselves;
(B) attest to their compliance with the governing principles established in §§ 373 and 373a of this title;
(C) certify to the Department of the Treasury through a sworn statement that they comply with the provisions of Regulation 7617 of November, 20, 2008, of the Office of the Patient; that they have not requested any patient to waive the right to bring potential causes of action or claims before state and federal courts; and that they have not approved institutional policies, guidelines, or regulations that may hinder or impair the patients’ right to receive medical attention.
However, to promote an adequate transition to the provisions established in this clause, hospital units shall be allowed to enjoy the tax benefits and incentives established herein without having to meet all the aforementioned requirements, solely during the period between January 1st, 2015, and December 31st, 2016. Nonetheless, they shall prove that they meet the requirements established in this clause as of January 1 st, 2017, if they wish to avail themselves of the benefits of this chapter for the remaining eight (8) years.
Natural or juridical persons that have availed themselves of the benefits of this chapter shall file a certification with the Secretary of the Treasury every two years on or before the last day of their taxable year attesting that the facilities, as well as the medical services rendered, meet the standards of medical excellence. Said certification shall be issued by the Secretary of Health and the criteria for the issuance thereof shall be prescribed by the Secretary of Health through regulations. Any inspection costs incurred by the Secretary of Health for the purpose of verifying the information supplied shall be reimbursed by every entity that has availed itself of the benefits of this chapter.
History —June 30, 1968, No. 168, p. 606, § 1; Aug. 5, 1988, No. 153, p. 648, § 1; Mar. 3, 1995, No. 27, § 1; Sept. 2, 2000, No. 375, § 1; July 20, 2005, No. 29, § 1; Jan. 20, 2006, No. 16, § 1; Nov. 17, 2015, No. 187, § 22; Dec. 28, 2016, No. 208, § 5.