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 942 - Green Energy Incentives Act of Puerto Rico (§§ 10421 — 10446) › Subchapter II - Green Energy Investment Incentives (§§ 10422 — 10442) › § 10436 - Tax exemption periods

(a) Exemption. — An exempt business that holds a decree granted under this chapter shall enjoy tax exemption for twenty-five (25) years.
(b) Flexible tax exemption. — Exempt businesses shall have the option of choosing the specific taxable years to be covered under their decrees with regard to GEI, provided that they notify the Secretary of the Treasury, the Director of Development, and the Executive Director not later than the date provided by law to file their income tax returns for said taxable year, including the extensions granted for said purpose. Once the exempt business opts for this benefit, the exemption period corresponding thereto shall be extended at the will of said exempt business for the number of taxable years it did not enjoy said benefit under the exemption decree.
(c) Provisions that apply to tax exemption on businesses with property devoted to the production of green energy. —
(1) The period during which a property devoted the production of renewable energy belong to any political subdivision, agency or instrumentality of the Government, shall not be deducted from the periods mentioned in subsection (a) of this section provided that in such cases the property shall be deemed, for the purposes of this chapter, as if it had not been previously devoted the production of green energy.
(2) When the exempt business is a property devoted to the production of green energy, the period to which reference is made in subsection (a) of this section shall not cover those periods in which the property devoted the production of green energy is on the market to be leased to an exempt business, or is vacant, or is leased to a nonexempt business, except as provided below. Said period shall be computed on the basis of the total period during which the property was at the disposal of an exempt business; provided, that the total number of years is not greater than that provided under said subsection (a) of this section, and the exempt business that qualifies as devoted the production of green energy notifies the Secretary of the Treasury, the Director of Development, and the Executive Director, in writing, of the date on which the property is leased to an exempt business for the first time, and the date on which the property is vacated and is again occupied by another exempt business.
In the event that the exemption of the exempt business that holds a decree as property devoted to the production of green energy should expire while it is being used under a lease by an exempt business, the property devoted to the production of green energy in use by the exempt business shall enjoy a fifty percent (50%) exemption on property taxes while the exempt business continues to use said property under a lease.
(3) When the exempt business is a property devoted to the production of green energy, the periods mentioned in subsection (a) of this section shall continue their normal course even when the exemption decree of the exempt business using said property as a result of the conclusion of its normal period or by revocation of its decree, elapses before the exemption period of the property devoted to the production of green energy, unless it is established in the case of revocation, that at the time said property was made available to the exempt business, the owners thereof had knowledge of the facts that later caused it to be revoked.
(d) Establishment of operations in other municipalities. — An exempt business may establish operations or additional facilities as part of the operations covered under an exemption decree in effect, in the same municipality where the main office is located or in any other municipality of Puerto Rico, without the need to apply for a new exemption decree or amend the decree in effect, provided that it notifies the Exemption Office within thirty (30) days as of the commencement of the operations or additional facility. By virtue of said notice, the unit, operations or additional facility shall be included in the exemption decree and the same shall enjoy the exemptions and benefits provided under this chapter for the remainder of the term of the exemption decree in effect.
(e) Interruption of the exemption period. — In the event that an exempt business has ceased operations and later wishes to resume operations, the time during which no operations were conducted shall not be deducted from the corresponding exemption period, and the exempt business may enjoy the remaining exemption period while the tax exemption decree is in effect; provided, that the Secretary of Development, in consultation with the Administration, determines that the ceasing of operations was justified and that reopening said exempt business shall be for the best social and economic interests of Puerto Rico.
(f) Setting of the date for commencing operations and the exemption periods. —
(1) The exempt business that holds a decree granted under this chapter may choose the date to commence operations for the purposes of this chapter by filing a sworn statement with the Exemption Office, with a copy to the Secretary of the Treasury stating the unconditional acceptance of the grant approved for the exempt business under this chapter. The date of the commencement of operations for purposes of this chapter may be the date of the first training or production payroll of the exempt business or any date within a period of two (2) years after the date of the first payroll.
(2) The exempt business may postpone the application of the fixed rate provided in this chapter for a period which shall not be greater than two (2) years from the date of commencement of operations fixed under clause (1) of this subsection. During the postponement period, said exempt business shall be subject to the applicable tax rate under Subtitle A of the Internal Revenue Code of Puerto Rico.
(3) The partial tax exemption period provided in this chapter on real or personal property shall commence on the first day of the fiscal year of the Government of Puerto Rico following the last fiscal year in which the exempt business was fully exempt pursuant to the provisions of this chapter. The partial exemption for said fiscal year shall correspond to the tax on the property owned by the exempt business on the 1st of January which precedes the beginning of said fiscal year.
(4) The partial exemption period provided in this chapter for the purpose of exemption from municipal licenses and municipal taxes shall commence on the first day of the first semester of the fiscal year of the Government of Puerto Rico following the expiration of the full-exemption period provided in said subsection. Provided, That in the case of exempt businesses that have been operating before applying for the benefits of this chapter, the date of commencement of operations for the purposes of municipal licenses shall be the first day of the semester following the date of filing of the tax exemption application.
(5) In the case of exempt businesses that hold a decree granted under this chapter or any tax or industrial incentive laws which have been operating before applying for the benefits of this chapter, the date of commencement of operations for the purposes of the fixed rate provided in § 10430 of this title shall be the date of filing an application with the Exemption Office, but the commencement date may be postponed for a term of not more than two (2) years from said date.
(6) An exempt business shall commence operations within one (1) year as of the execution of the decree, which term may be extended at the request of such business for just cause, but no extension shall be granted to extend the date of commencement of operations for a term of not more than five (5) years as of the approval of the decree.
History —July 19, 2010, No. 83, § 2.15.