Legislation enacted on June 14, 2020, includes economic and tax relief measures that are provided in response to the coronavirus (COVID-19) pandemic.
House Bill 2468 was signed by the governor and enacted as Act 57 on June 14, 2020.
The legislation introduces new relief measures regarding income tax and sales and use tax. It also provides other miscellaneous provisions and codifies certain relief measures provided administratively by the Puerto Rico Department of Treasury.
* ”Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136)
Sales and use tax
Municipal license tax
The amount of debt associated with respect to loans from the PPP and Disaster Fund under CARES Act or any other federal law that is forgiven by these programs and any other stimulus or federal or state subsidy will be excluded from gross income for municipal license tax purposes.
For tax year 2020, all holders of a tax exemption decree issued under Act 60, previous similar tax incentives, or any special incentives acts will be deemed to have complied with the following decree requirements to the extent noncompliance is due to COVID-19: (1) creation and retention of employees; (2) gross volume; and (3) machinery and equipment investment.
Sales and use tax
Monthly sales and use tax returns: The deadline for filing the monthly sales and use tax returns and for remitting the corresponding payment, for the periods of February, March, April, and May 2020 will be, respectively, as follows:
Monthly import tax return: The deadline for filing this return and the corresponding payment for the periods of March, April, and May, 2020 will be, respectively, as follows:
Biweekly sales and use tax payments: Penalties will not be assessed or imposed for noncompliance with requirements for biweekly sales and use tax payments for the months of March, April, May, and June 2020, as long as the total of the sales and use tax owed for these months is paid in full with the filing of the monthly sales and use tax returns for the periods.
Temporary certificate exemption: An exemption certificate allows for the import or acquisition of taxable items for resale and free of the sales and use tax payment (import tax) to all merchants who are “resellers” (as defined in section 4010.01 (ww) of the 2011 PR Code), and that have a reseller certificate issued in accordance with the provisions of section 4050.04 (c) of the 2011 PR Code. The exemption certificate will be valid from Monday, April 6, 2020, until Tuesday, June 30, 2020. This allows merchants to import or buy taxable items in Puerto Rico exclusively for resale during the “temporary exemption period” without the requirement to pay the sales and use tax for such transactions.
Information returns or declarations: The due dates for filing the information declarations corresponding to year 2019 are extended up to May 31, 2020.
Licenses and permits: Licenses and permits that would otherwise expire after March 1, 2020, are automatically extended for a period of six months.
Withholding of tax on payments for services rendered: The income tax withholding requirement on payments for services rendered covered by section 1062.03 of the 2011 PR Code will be waived from Monday, March 23, 2020, through Tuesday, June 30, 2020. This waiver does not exempt the payee of the services rendered from income tax on the payments receipt.
For more information, contact a KPMG tax professional in Puerto Rico:
Rolando Lopez | +1 (787) 622-5340 | email@example.com
Carlos Molina | +1 (787) 622-5311 | firstname.lastname@example.org
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