Global Tax Alert (News from Americas Tax Center) | 9 January 2014

Puerto Rico extends deadline for requesting partial waiver from additional tax on gross income to 31 January

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Puerto Rico’s Treasury Department (PRTD) has extended (AD 13-21) the deadline for requesting a partial waiver from the additional tax on gross income (ATGI) for tax year 2013 from 31 December 2013, to 31 January 2014.

Background

Section 1023.10 of Puerto Rico’s Internal Revenue Code of 2011, as amended, imposes the ATGI as part of the AMT calculation on the gross income of entities taxed as corporations and partners, shareholders and members of flow-through entities. The ATGI tax rates vary depending on the level of gross revenues.

On 3 December 2013, the PRTD issued Administrative Determination 13-20 (AD 13-20), which provided the procedures for requesting a waiver from the additional tax on gross income for pass-through entities. In light of the short time period between the issuance of AD 13-20 and the deadline for requesting a waiver, the PRTD decided to extend the deadline.

Due date — Year 2013

Under the new deadline, taxpayers have until January 31, 2014, to file for a partial ATGI tax rate waiver request. Taxpayers must also include an agreed upon procedures (AUP) report with the request.

The Secretary of the PRTD has 90 days to respond to the request. The PRTD has 60 days to notify a taxpayer if additional information is necessary. If the PRTD requires more information, the 90-day period is suspended until the taxpayer submits the additional information.

Where to file

The required documents must be submitted to Assistant Secretary for Internal Revenue, Treasury Department, Intendente Ramírez Building, Office 620, San Juan, Puerto Rico. Once the documents are received, the Assistant Secretary will contact the taxpayer or authorized representative to set up a meeting to discuss the submitted information as necessary.

Implications

It is important to note that the additional time granted by the PRTD to request the ATGI tax rate waiver is available not only to the taxpayers of pass-through entities but to all taxpayers to which the ATGI is applicable, and intend to request the partial waiver for tax year 2013.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Puerto Rico LLC, San Juan
  • Marcel Ramos
    +1 787 772 7229
    marcel.ramos@ey.com
  • María T. Riollano
    +1 787 772 7077
    maria.riollano@ey.com
  • Rosa M. Rodríguez
    +1 787 772 7062
    rosa.rodriguez@ey.com

EYG no. CM4092