Tuesday, April 7, 2020

Puerto Rico House Passes Amendments to New Tax Model

By on February 27, 2020

SAN JUAN — The Puerto Rico House of Representatives passed Thursday House Bill 2419, authored by Speaker Carlos “Johnny” Méndez Núñez, along with the Rep. Antonio “Tony” Soto Torres to incorporate technical amendments to the New Tax Model, “looking to adjust the benefits of taxpayers,” the chamber wrote.

According to the legislative measure, it is the result of the combined effort of the Legislative Assembly together with personnel of the Department of the Treasury to pass a law that meets “the standard of being fiscally neutral, validated by the Fiscal Oversight Board.”

Among the amendments is the tax reduction of 5 percent to 8 percent to any taxpayer whose income does not exceed $100,000. In the line of the informative declaration on the estimated taxpayer payment, the filing date for the 2019 taxable year is postponed until March 31. In addition, the payment date is postponed until May 15 instead of April 15, 2020.

As for the business-to-business services tax, the exemption is increased from $200,000 to $300,000. “This benefit represents an additional $5.3 million, equal to 85 percent of the total taxpayers who will be exempt, for a grand total of $20.8 million,” the House’s press release reads.

Small and medium enterprises that make up to $10 million will be exempt from the obligation of having their financial statements audited.

Nonprofit entities and the construction, film and telecommunications industries also received some incentives or exemptions.

The lawmakers passed House Resolution 1678 to analyze the maturity of the credits and tax benefits established by Act 154-2010 for the benefit of the manufacturing industry of Puerto Rico; and House Resolution 1719 to investigate the use of federal funds allocated to state agencies for the reconstruction of Puerto Rico after the passage of hurricanes Irma and María.

The eighth and ninth partial report of the Committee on Small and Midsize Businesses and Commerce, on House Resolution 127 was received. It investigates the legal framework for the creation, promotion, development and sustainability of the business sector of small and midsize enterprises to ensure the creation of jobs in coordination with the academic and private sectors as well as state and municipal government entities.

The eighth partial report recommends new amendments to the “Law for the Technological Development of Microentrepreneurs, Small and Medium-sized Merchants and Cooperative-Based Companies” to provide that annual reports be sent to the Legislative Assembly on the progress of its implementation.

Meanwhile, the ninth partial report investigated the incentive programs, loans or financial aid of the Economic Development Bank to help small and midsize enterprises in the southern region after the earthquakes that have rocked Puerto Rico since December.

The House of Representatives recessed its work until March 5 at 1 p.m.

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