Tax Alert – September 2022
September 29, 2022
ADMINISTRATIVE DETERMINATION 22-08 (“AD 22-08”)
Tax Administrative Measures in response to the Emergency Caused after the passage of Hurricane Fiona
The AD 22-08 has been issued by the Puerto Rico Treasury Department (“PRTD”) to establish tax administrative measures for the benefit of the taxpayers and its representatives affected by the emergency generated after the passage of Hurricane Fiona (“Fiona”). As part of the measures, the PRTD determined the following:
Tax Filings and the corresponding payments
a. Income tax filing for individuals, corporations, pass-through entities, and other juridical entities – The PRTD postponed until December 15, 2022, the due date to file the income tax return or request for extension for those taxpayers having an original or extended due date between September 30 and December 15, 2022. The determination also postponed the due date to pay the tax liability to be December 15, 2022, to the extent the original due date of the return/extension is between September 30 and December 15, 2022.
b. Tax Return (Form 481.10) – Credit for Persons Aged 65 or Older and Compensatory Credit for Low Income Pensioners Return – The PRTD postponed until December 15, 2022, the due date to file this return.
c. Monthly Sales and Use Tax Return/Imports Declaration – The PRTD postponed until October 20, 2022, the due date to file the monthly sales and use tax return and the imports declaration for the month of August 2022. Also, the PRTD postponed the due date to remit the sales and use tax from September 20, 2022, to October 20, 2022.
d. Other returns, payments or deposits – The filing of other returns, declarations or payments/deposits related to a) sales and use tax, except for August 2022 month, b) excise tax, c) alcoholic beverages taxes, d) special excise tax applicable to foreign corporations under Act 154, e) withholding over wages, service rendered and any other withholding at source, and f) estimated income tax payments, has not been postponed under the AD 22-08. Therefore, returns, declarations and its corresponding payments must be made in accordance with the Puerto Rico Internal Revenue Code (“PR Code”).
Second Installment – 2021 Individual income tax determined – The second installment to pay the 50% of the tax liability has been postponed from October 18, 2022, to December 15, 2022.
Insurance Bonds – The PRTD determined that any bond expiring between September 19 and before November 18, 2022, will be extended automatically until November 18, 2022.
Claims on Mathematical Error Notifications and Notifications for Adjustment on Returns – The period to submit the claims for the above-mentioned notifications, when the due date as indicated in the notification is between September 19 and before November 18, 2022, has been extended until November 18, 2022.
Collection Notices and Liens – The PRTD determined that will not be issuing any collection notice or lien until November 18, 2022.
Payment Plans for the payment of Taxes – The PRTD determined that any taxpayer with a valid payment plan as of September 19, 2022, that has been economically affected by the passage of Hurricane Fiona and that failed to comply with the requisites of such plan, may submit/request a new payment plan on or before December 31, 2022.
Licenses of Internal Revenue – Any license established under the PR Code and administered by the PRTD through SURI, whose renovation period ends between September 19 and before November 18, 2022, has now been extended until November 18, 2022.
Requirement to Pay the Imports Tax and Purchases of Taxable Items for Resale – The PRTD will be issuing through SURI a “Temporary Certificate of Exemption” for those Reseller Merchants. This certificate will allow the merchants to import taxable items exclusively for the resale (inventory) without paying the SUT upon its introduction. This exemption also applies to the acquisition through purchase of the taxable items in Puerto Rico when the destination is the resale (inventory). The exempted period will be from October 1 through October 31, 2022.
Distributions due to Disaster Declared by the Governor of Puerto Rico – Following the disaster’s declaration issued by the President of the United States, as solicited by the Governor of Puerto Rico; the dispositions of the PR Code to allow the Special Distributions from Retirement Plans and IRA’s due to disasters has been activated. The PRTD determines that the permissible period to issue those Special Distributions will be from October 6 to December 31, 2022. The PRTD will issue a Circular Letter regarding this topic and its requirements shortly.
Qualified Payment for Disaster Relief – Following the disaster’s declaration issued by the President of the United States, as solicited by the Governor of Puerto Rico; the dispositions of the PR Code to allow the relief payments that are made directly by the employer to the employee or independent contractor have been activated. This type of payments is excluded from the gross income of the employee or independent contractor. Employers will be able to deduct the qualified payments to the extent the employer complies with the notification and informative return requirements as established by the PRTD. Payments made by the employers for the benefit of the employees or independent contractors in connection with goods and services also qualifies as relief payments. The PRTD determines that the permissible period to issue those qualified payments will be from September 19 to December 31, 2022. The PRTD will issue a Circular Letter regarding this topic and its requirements/limits shortly.
Loans to Employees and Independent Contractors for Disaster Relief – Following the disaster’s declaration issued by the President of the United States, as solicited by the Governor of Puerto Rico; the dispositions of the PR Code to allow the free interest loans for disaster relief from the employer to its employees or independent contractors have been activated. The relief loans will not constitute gross income to the employees or independent contractors. The PRTD determined that the permissible period to issue those loans will be from September 19 to December 31, 2022. Section 1031.01 of the PR Code provides certain limitations.
Administrative Terms before the PRTD that are not provided thru the SURI platform – The PRTD extended until November 18, 2022, the due date of any administrative transaction that cannot be addressed/completed through the SURI platform, included but not limited to:
- Administrative Determination (“Ruling”) with due dates between September 19 and before November 18, 2022.
- Administrative Revision Letter for Debts with expiration dates between September 19 and before November 18, 2022.
- Change of Tax Year Applications due between September 19 and before November 18, 2022.
- Change of Accounting Method Applications due between September 19 and before November 18, 2022.
Also, Administrative Complaints and any term for the submission of information or documents required by the Office of Administrative Appeals of the Department (“OAA”), whose filing date expires during the period of September 19 and October 18, 2022, will be extended until October 18, 2022.
Any Administrative Hearing cited by the OAA to be held on the 19 and 20 of September 2022 was automatically suspended. The OAA will be notifying the taxpayers of the new dates.
KRESTON PR, LLC
1509 FD Roosevelt Avenue Suite 303 / Guaynabo, PR 00968-2612
PO Box 193488 / San Juan, PR 00919-3488
Tel. (787) 646-4611 / Fax (787) 764-8688 Web: www.krestonpr.com / www.kreston.com
Email Taxes: email@example.com
IMPORTANT DISCLAIMER: This bulletin and its content do not constitute advice. It is intended for information purposes only and should not be regarded as specific advice. Accordingly, no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors and ensuring that such advice specifically relates to their particular circumstances.
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