Impostos a Puerto Rico

Company Tax

Tax Rate For Foreign Companies

A domestic corporation is taxable in Puerto Rico on its worldwide income. A foreign company engaged in trade or business in Puerto Rico is taxed at the standard corporate tax rates on income sourced in Puerto Rico that is considered an effectively connected income. Income that is not effectively connected, fixed or determinable, annual or periodical, derived from Puerto Rican sources by non-resident alien companies and partnerships is generally taxed at a rate of 29%. Furthermore, branches of foreign corporations operating in Puerto Rico may be subject to a 10% tax on the dividend equivalent amount.
A company is resident in Puerto Rico if it is created or organized in Puerto Rico or if it is engaged in a trade or business in the country.

Capital Gains Taxation

The capital gains tax is generally levied at a fixed rate of 20% instead of the standard corporate tax rate.

Main Allowable Deductions and Tax Credits

Deductions and credits are available for job creation; energy costs; research and development; investments in infrastructure, machinery and equipment, purchase of locally manufactured products, export services, charitable contributions (capped at 10% of net income); operational losses and bad debts, depreciation, start-up expenses (deducted in the tax year in which the trade or business begins or rateably amortised over five years), insurance premiums and business expense. Goodwill is generally capitalised and amortised over 15 years. Interest expense is deductible (if paid to a non-Puerto Rico resident related party, a 29% withholding at source applies). The rent of a property used in the business is also deductible. Meals and entertainment are deductible up to 75%, travelling expenses up to 50%. Automobiles used for business can be depreciated over a five-year useful life (three years in the case of salespersons), capped at USD 30,000 for a maximum annual depreciation of USD 6,000.
Taxes may be deductible (except for corporate income tax).
Net operating losses may be carried forward for 10 taxable years (12 years for losses generated from taxable years beginning prior to 31 December 2012). In both cases, the deduction is limited to 80% of the taxable income of the year (90% for losses incurred after 31 December 2018). Losses realized during the 2020 fiscal year can be carried back for 2 years, first against the 2018 taxable year and any remaining amounts against the 2019 taxable year (limited to USD 200,000, with a refund of up to USD 50,000). Such measure does not apply to taxpayers with gross revenues above USD 10 million nor to large taxpayers (COVID-19-related measure).

A corporation subject to the alternative minimum tax is not allowed to claim the same deductions it claimed for regular income tax purposes.

Other Corporate Taxes

Other taxes include: special excise tax; municipal tax on licenses (minimum 0.2%, generally at 0.5% on the gross receipts of a business); property tax (generally from 8.03% to 11.83% of the 1958 market value of real property); federal insurance contribution tax (FICA, 7.65% of salaries, which consists of 6.2% of Social Security and 1.45% of Medicare Tax, calculated on the first USD 147,000 of wages for 2022); federal unemployment tax (FUTA, 6% on the first USD 7,000 of total wages paid during the calendar year to each employee, with a credit of 5.4% granted for the Puerto Rico unemployment tax paid); state unemployment tax (SUTA, paid on the first USD 7,000 of total wages paid to each employee during the calendar year, plus a special tax equal to 1% of the wages subject to unemployment tax); workmen’s accident compensation insurance (based on total wages paid during the fiscal year); disability insurance (0.3% on the first USD 9,000 of the total wages paid in the year is paid by the employer); social security contributions for drivers (USD 0.30 per week or fraction thereof). Furthermore, entities organized as corporations must submit a balance sheet annual report with a filing fee of USD 150.

Other Domestic Resources

Puerto Rico Treasury Department (PRTD)

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

Personal deductions are allowed for Puerto Rican residents and non-resident U.S. citizens, including certain charitable contributions (subject to 50% of adjusted gross income), education expenses, medical expenses (in excess of 6% of adjusted gross income), mortgages interests (capped at USD 35,000 or 30% of adjusted gross income), retirement plans (limited to USD 5,000 per individual), etc.
Furthermore, personal exemptions apply: USD 3,500 per individual and USD 7,000 for married taxpayers living together and filing jointly; USD 2,500 per dependant; USD 1,500 for veterans; etc. Puerto Rican non-resident foreign nationals are not allowed any exemptions.
Losses carryover for individuals with a net loss in a trade or business for three consecutive taxable years is allowed at 100%; whereas the carryforward is limited to 90% of the net income.

Special Expatriate Tax Regime

Puerto Rican residents are taxed in Puerto Rico on their worldwide income. Non-residents are only taxed on their Puerto Rican source income.
Income from personal services performed within the country will not be considered from Puerto Rican sources if it is USD 3,000 or less and the individual was present in Puerto Rico for 90 days or less during the calendar year.
An individual is considered resident if he/she is domiciled in Puerto Rico. Puerto Rican non-resident foreign nationals may not claim deductions.