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Puerto Rico Income Tax Amnesty Program
Puerto Rico Income Tax Amnesty Program
House Bill 3725 was enacted into law, now Act 218 of November 7, 2011 (“Act 218”) whereby the PR government approved an income tax amnesty program which will be in effect until February 29, 2012. The funds raised as part of this amnesty program will be mainly utilized to pay compensation due to the Policy of PR and other public agents.
Taxpayers may elect to satisfy any assessed income tax debts due to the Puerto Rico Treasury Department (“PRTD”) including estate and gift taxes as well as the special tax imposed on real property; with the benefit of not paying interest, surcharges, penalties and other additions to the tax. Also, the term “income taxes” includes income tax withheld at source of any concept and taxes imposed under the PR Insurance Code. In general terms, the outstanding debts (principal amount) must be totally satisfied on or before February 29, 2012 except when the Secretary of the Treasury (“Secretary”) approves an Installment Agreement in which case the due date for payment will be extended until June 30, 2012. It should be noted that those taxpayers interested in requesting said agreement must do so on or before February 29, 2012.
Taxpayers are entitled to object any assessed tax debt being reflected in the records of the PRTD to the extent the claim is filed on or before February 29, 2012 in accordance with the requirements to be established by the Secretary either by Regulations, Circular Letter or any other written communication. In the event the PRTD determines that the tax debt is applicable, taxpayers may still take advantage of the tax amnesty inasmuch as he/she pays the corresponding tax within 30 days from the date of the Notification to be issued by the Secretary. Furthermore, tax returns that are currently under examination or in process of being investigated by the PRTD qualify for the tax amnesty as well as taxpayers that have received a Notification and Demand for Payment from the PRTD. Payments covered by this program are considered voluntary and final, and therefore, would not be subject to future claims for refunds or tax credits.
The following taxpayers are not eligible for the Tax Amnesty Program:
Act 218 allows the PR government to create an interagency committee that would be responsible to clean-up the PRTD tax records. This committee will be comprised by members of the PRTD, the PR Government Development Bank, the Office of the Controller of PR, and the Office of Management and Office of PR.
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