2023 Laws of Puerto Rico › TITLE SEVEN - Banking (§§ 1 — 3116) › PART VII - Other Financial Institutions (§§ 3001-3012 — 3116) › Chapter 145 - International Financial Center Regulatory Act (§§ 3081 — 3106) › § 3085 - Income tax

(a) Income derived by international financial institutions holding a decree under this chapter, from the conduct of the activities described in § 3091(a) of this title, shall be subject to a four percent (4%) fixed tax rate on their net income, in lieu of any other tax imposed by the Code, except as provided in subsection (b) of this section.
(b) General rule.— In the case of international financial institutions operating as a bank unit, the net income, computed in accordance with the provisions of § 30105 of Title 13, derived by international financial institutions from the active conduct of the activities described in § 3091(a) of this title in excess of twenty percent (20%) of the total net income derived in the taxable year by the bank for which it operates as a unit (including the income derived from such unit) shall be subject to the tax rates established in the Code for corporations and partnerships.
(c) The interest, finance charges, dividends, or distributive shares in partnership interests earned by international financial institutions duly authorized by this chapter shall not be treated as gross income from sources in Puerto Rico for the purposes of clauses (1) and (2) of subsection (a) of § 30151 of Title 13.
(d) The provisions of § 30278 of Title 13, which require the withholding of income taxes at the source in the case of payments made to nonresident individuals, shall not apply to interest, finance charges, dividends, or distributive shares in partnership interests received from international financial institutions duly authorized under this chapter.
(e) The provisions of § 30281 of Title 13, which require the withholding of income taxes at the source in the case of payments made to resident or foreign corporations and partnerships which have not received income actually connected with a trade or business in Puerto Rico, shall not apply to interest, finance charges, dividends, or distributive shares in partnership interests received from international financial institutions duly authorized under this chapter.
(f) Income derived by a nonresident alien individual consisting of interest, finance charges, dividends, or distributive shares in partnership interests received from international financial institutions duly authorized under this chapter, shall not be subject to the tax imposed under § 30431 of Title 13.
(g) Income derived by a foreign corporation or partnership consisting of interest, finance charges, dividends, or distributive shares in partnership interests received from international financial institutions duly authorized under this chapter, shall not be subject to the tax imposed under § 30441(a)(1)(A) of Title 13.
(h) The provisions of § 30442 of Title 13 shall not apply to international financial institutions duly authorized under this chapter.
(i) Puerto Rico resident shareholders or partners of international financial institutions duly authorized under this chapter shall be subject to a six percent (6%) tax on the dividends or benefits of the net income of said international financial institution, including the alternate basic tax and the alternative minimum tax imposed by the Code, insofar as they have been subject to the fixed income tax rate provided in subsection (a) of this section.
(j) None of the provisions of this section shall be construed to limit the power of the Secretary of the Treasury to apply the provisions § 30179 of Title 13 to international financial institutions or to any other person.
History —Sept. 25, 2012, No. 273, § 6.