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September 2017 wrote one of the most, if not the most, dramatic and important chapters in Puerto Rico’s modern history. The widespread destruction caused by hurricanes Irma and Maria negatively impacted an already-beleaguered economy that was mired in an 11-year recessionary period. However, almost paradoxically, these catastrophic events could very well represent a positive and significant turning point in the path to economic recovery that the island desperately needs.

Section 1061.17 of the 2011 Puerto Rico Internal Revenue Code, as amended (the “Code”), allows individual taxpayers that are not subject to the payment of estimated taxes the option to pay their income tax liability in two (2) equal installments – with the first installment due on the fifteenth day of the fourth month after the close of the individual’s tax year, and the second installment due no later than the fifteenth day of the sixth month after the first installment. For example, if Mr. X has a December 31, 2017 year end, the first installment for his 2017 income tax liability would be due on April 15, 2018, whilst the second would be due on October 15, 2018.

On January 27, 2016, the Puerto Rico Treasury Department (“PRTD”) unveiled the Unified Internal Revenue System (“SURI”, for its acronym in Spanish) as means to modernize and improve the PRTD’s administration of tax revenue and supervisory duties. By consolidating its various processing systems into a single platform, the agency is allowed a fully integrated snapshot of every taxpayer’s accounts.

The Puerto Rico State Insurance Fund Corporation has issued the Workers’ Compensation Premium Notice for the Final Premium Statement for fiscal year 2017-2018 and the Preliminary Premium for 2018-2019, for those policies that were not filed electronically, covering the salaries reported on the payroll statement from July 1, 2017 throught June 30, 2018.

The FASB issued a proposed ASU, Leases (Topic 842): Narrow-Scope Improvements for Lessors, to address certain issues raised by lessors when implementing the new leases guidance in ASU 2016-02, Leases (Topic 842). The amendments in the proposed ASU would:

On July 25, 2018, Act No. 20 of 2012 (“Act 20-2012”) was amended by Act 157 of 2018 (“Act 157-2018”) to extend its limited exemption on property taxes to other eligible service industries within Act 20.

ASC 606 revenue recognition standard will affect the revenue recognition of most companies. While this implementation takes place, companies should also focus on the opportunity for an enhanced revenue stream.

Act No. 115 was amended to allow employers to obtain written authorization from their non-exempt employees, who were aided during a situation of emergency.

In this issue we will review the FASB propose amendments to the definition of collections to Not-For-Profit Entities.

The US Tax Cuts and Job Act of 2017 aims to spur long-term investments in low-income urban and rural communities throughout the US and Puerto Rico by investing in a qualified opportunity fund.

Companies have been employing digital technology for years, but they are only now committing themselves to pursuing durable digital transformations.

This is a brief overview of recently enacted (during the last extraordinary session) tax statutes in Puerto Rico. The much-awaited Tax Reform and Incentives Code were not approved during this session, though it is expected that they will be considered in the August session.

Employers will no longer have to visit the Department of Labor and Human Resources (DTRH) in search of posters of labor laws. Now they can download them through the internet and reproduce them at their convenience to comply with the obligation to place them in a visible area in your company.

On July 2, 2018, the Puerto Fiscal Agency and Financial Advisory Authority (“AAFAF” for its acronym in Spanish), issued Administrative Order OA-2018-10 to dissolve the Tax Credits and Disbursements Authorization Committee constituted and authorized under AAFAF’s Administrative Order OA-2017-01.

When held by leadership, there’s no chance that risk management will be taken seriously. Significant fraud avoidance and mitigation are built on top-level awareness and commitment, and effective assessment to direct risk management activities.

On June 21, the U.S. Supreme Court handed down its decision in the South Dakota v. Wayfair, Inc. case (the Wayfair decision) related to sales and use tax nexus standards. In this ruling, the Supreme Court overruled its previous decisions in other landmark cases, commonly referred to as National Bellas Hess and Quill, which had established a physical presence nexus standard for sales and use tax purposes. Under these prior decisions, entities were generally not required to collect and remit sales and use tax in states where they had no physical presence but sold products “remotely” to customers.