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Act 60 Signed By The Governor Of Puerto Rico

On July 1, 2019 the then Governor of Puerto Rico signed Act 60-2019 enacting the Puerto Rico Incentives Code (the “Act 60”) incorporating most of Puerto Rico incentives legislation within a single statute.  However, within the provisions of Act 60 several important amendments to the Puerto Rico Internal Revenue Code of 2011, as amended (the “PR IRC”) were introduced. Following we will summarize these amendments to the PR IRC.

Treasury Clarifies Act 257-2018 Effective Dates
On December 10, 2018, the Governor of Puerto Rico signed into law Act No. 257-2018 ("Act 257-2018"), which incorporated various amendments to the Puerto Rico Internal Revenue Code of 2011, as amended ("the Code"). The provisions of Act 257-2018 became effective immediately upon its enactment, unless otherwise specified within the statute.

The Legislative Assembly is working on a technical amendments bill to clarify the amendments introduced by Act 257-2018, including the effective date of several of its provisions.   In the meantime, on May 1, 2019 the Puerto Rico Treasury Department ("Department") issued Administrative Determination Number 19-01 (“AD 19-01”) clarifying the effective dates of the amendments introduced by Act 257-2018 that do not have specific effective dates.

Self-Assessment of Real Property Taxes
Real property taxes are imposed annually by the Municipal Revenue Collection Center (“CRIM”) based on its own pre-determined assessed value.  The recently enacted Act 6-2019 will change this procedure with respect to certain unassessed real properties.  These properties may now be subject to this self- assessment procedure.
In general, Act 6-2019 applies to unmortgage property that remain unassessed by the CRIM for real property tax purposes.  Taxpayer may elect to have this real property appraised by a Puerto Rico authorized professional appraiser.  The taxable value shall be 10.55% of the value so determined by the independent appraiser and it shall apply for the taxable year in which the appraisal is made and for all following taxable years.

Governor Ricardo Rossello Signs Into Law the Tax Reform, H.B. 1544

As discussed in our November 19, 2018 newsletter, the Puerto Rico legislature approved the tax reform bill (H.B.1544) to amend the Puerto Rico Internal Revenue Code of 2011, as amended, bringing significant changes to the Puerto Rico tax system. On December 10, 2018, the Governor signed into law H.B.1544.

The Fiscal Oversight Management Board (the "FOMB") has made public expressions as a result of the Governor’s signature of the tax reform bill raising concerns that the video lottery provisions included in this legislation are not revenue neutral. Pursuant to its authority under PROMESA, the FOMB may take any action to prevent the enforcement or application of a law that may be inconsistent with the fiscal plan.

In our A&R Tax E-News Alert we summarized the amendments brought by the enactment of Act 159-2015 (“Act159”). We wished to clarify our discussion related to the sales and use tax (“SUT”) to be imposed on services rendered by non-resident persons to persons located within Puerto Rico particularly in light of issuance by the Puerto Rico Department of the Treasury of Administrative Determination Number 15-21 of October 5, 2015 (“AD 15-21”).

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