rocket
Introducing the Orbitax International Tax Platform, a revolutionary suite of integrated tax solutions including research, compliance, calculations, entity management and charting. Find out more.
News Share

The Tax Hub

Daily Tax Newsletter

Puerto Rico

Responsive image

Puerto Rico Tax Reform Bill Signed into Law

On 10 December 2018, Puerto Rico Governor Ricardo Rosselló signed into law Bill No. 1544 as Law No. 257 of 10 December 2018. Some of the main measures of the law include:

  • A reduction in the basic corporate tax rate from 20% to 18.5%, resulting in a top rate of 37.5% (additional surtax, with a top rate of 19%, is maintained), as well as related adjustments in the alternative minimum tax;
  • The introduction of optional fixed tax rates for corporations whose source of income comes substantially from the provision of services that has been subject to withholding tax or estimated payment:
    • up to USD 100,000 – 6%
    • over USD 100,000 up to 200,000 – 10%
    • over USD 200,000 up to 300,000 – 13%
    • over USD 300,000 up to 400,000 – 15%
    • over USD 400,000 up to 500,000 – 17%
    • over USD 500,000 – 20%
  • An increase in the withholding tax on services from 7% to 10%, with several exemptions;
  • The introduction of a special 7% sales and use tax (SUT) rate for prepared foods, which requires that certain standards be met by the business;
  • An increase in the exemption threshold for the 4% SUT on business and professional services to annual sales of USD 200,000 (threshold applies at controlled group level);
  • The introduction of new rules for the determination of a controlled group, which generally includes a 50% ownership of one entity by another or 50% common ownership by a third entity;
  • The introduction of a general 5% individual income tax discount (credit);
  • The amendment of the alternative minimum tax rates for individuals with progressive rates of 1% to 24% (currently 10% to 24%); and
  • The introduction of optional fixed tax rates for individuals carrying on a business with progressive rates of 6% to 20%, subject to the condition that the business income has been subject to withholding tax or estimated payment.

The changes are to generally apply for periods beginning after 31 December 2018, although the increase in the exemption threshold for the SUT on services is to apply from 1 March 2019. Further, it should be noted that the law is subject to review by the Financial Oversight and Management Board in relation to Puerto Rico's budget issues, and changes may occur.

Additional details, including any changes, will be published once available.

Powerful Tax Tools

NEW

FX Rates

Global FX Rates including Tax Year Average FX Rates and Spot Rates for all Reporting Currencies.

NEW

Corporate Tax Rates

Corporate tax rates, surtaxes, and effective tax rates for the current year, as well as historical rates and approved future rates.

NEW

Country Analysis

Detailed tax guidance for companies doing business in over 100 countries, including summaries and snapshots of key tax facts and issues.

NEW

Cross Border Tax Calculator

Calculate total tax costs and benefits of a cross border transaction including withholding tax, participation exemption and foreign tax credit rules.

NEW

Cross Border Tax Rates

Provides Domestic, treaty and EU cross border tax rates for over 5,000 country combinations for 9 different payment streams.

NEW

OECD BEPS Project

Complete overview of the OECD BEPS Project, including daily BEPS news, country adoption of BEPS measures, and an overview of the 15 BEPS Actions.

NEW

Tax Calendar

Customizable calendar tool that tracks corporate income tax, value added tax and transfer pricing obligations by country or entity.

NEW

Tax Forms

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

NEW

Worldwide Tax Treaties

Repository including thousands of tax treaties (in English), OECD, UN and US Models, relevant EU Directives, Technical Explanations, and more.

NEW

Worldwide Tax Planner

Calculates the worldwide tax cost of what-if scenarios based on legal entity structure, taxable income, and cross border transactions.

NEW

Certified Rates Report

Customizable Certified Rates Report providing updated corporate and withholding tax rates at the end of each month for over 100 countries.

NEW

Withholding Tax Minimizer

Enables quick calculation of tax costs and benefits of cross border transactions considering all possible transaction combinations and optimal routes.

NEW

VAT Rates

Provides value added tax (VAT) rates, goods and services tax (GST) rates and other indirect tax rates for over 100 countries.

NEW

NOL Calculator

Country specific calculator to determine how net operating losses can be utilized in carryback and carryforward years.

NEW

Transfer Pricing Calculator

Calculates TP ratios under various TP methods and calculates the difference between target ratios and actual ratios.

NEW

Individual Income Tax Rates

Individual tax rates for over 100 countries.

Play of the Day

Translate Documents

English translations of key tax forms for over 80 countries, including tax return forms, treaty benefit forms, withholding tax forms, and more.

We’re here to help

We’re here to answer any questions you have about the Orbitax products and services.

Send us a message

Who’s behind Orbitax?

We’re committed to providing high value, low cost tax research and management solutions.

Learn More