Year-end tax planning considerations: To audit or not to audit
Services
We approach each audit with sharp thought, straight talk and common sense. In addition to verifying that financial results are fairly presented and meet...
-
Financial statements audits
Financial statement audits
-
Compliance audits
Compliance audits
-
Compilations and reviews
Compilations and audit
-
Agreed-upon procedures
Agreed-upon procedures
At Kevane Grant Thornton, tax is a key part of our organization and our award-winning teams can offer you a range of solutions, whatever the size of your...
-
Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
-
International tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
-
Tax compliance
Business Tax
-
Individual taxes
Individual taxes
-
Estate and succession planning
Estate and succession planning
-
Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
-
Sales and use tax and indirect taxes
SUT/ VAT & indirect taxes
-
Tax incentives program
Tax incentives program
-
Transfer Pricing Study
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
As your business grows, our advisory services are designed to help you achieve your goals. Successful growth often means navigating a complex array of...
-
Business consulting
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
-
Forensic and investigative services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
-
Fraud and investigations
The commercial landscape is changing fast. An ever more regulated environment means organizations today must adopt stringent governance and compliance processes. As business has become global, organizations need to adapt to deal with multi-jurisdictional investigations, litigation, and dispute resolution, address the threat of cyber-attack and at the same time protect the organization’s value.
-
Dispute resolutions
Our independent experts are experienced in advising on civil and criminal matters involving contract breaches, partnership disputes, auditor negligence, shareholder disputes and company valuations, disputes for corporates, the public sector and individuals. We act in all forms of dispute resolution, including litigation, arbitration, and mediation.
-
Business risk services
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
-
Internal audit
We work with our clients to assess their corporate level risk, identify areas of greatest risk and develop appropriate work plans and audit programs to mitigate these risks.
-
Service organization reports
As a service organization, you know how important it is to produce a report for your customers and their auditors that instills confidence and enhances their trust in your services. Grant Thornton Advisory professionals can help you determine which report(s) will satisfy your customers’ needs and provide relevant information to your customers and customers’ auditors that will be a business benefit to you.
-
Transactional advisory services
Transactions are significant events in the life of a business – a successful deal that can have a lasting impact on the future shape of the organizations involved. Because the stakes are high for both buyers and sellers, experience, determination and pragmatism are required to bring deals safely through to conclusion.
-
Mergers and acquisitions
Globalization and company growth ambitions are driving an increase in M&A activity worldwide as businesses look to establish a footprint in countries beyond their own. Even within their own regions, many businesses feel the pressure to acquire in order to establish a strategic presence in new markets, such as those being created by rapid technological innovation.
-
Valuations
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
-
Recovery and reorganization
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
Our outsourcing services allow you to save time and money in order to concentrate on the competencies and the core business activities.
Careers page for Kevane Grant Thornton
The Kevane Grant Thornton Difference
Grant Thornton prides itself on being a values-driven organization and we have more than 56,000 people in over 140 countries who are passionately committed to...
Diversity helps us meet the demands of a changing world. We value the fact that our people come from all walks of life and that this diversity of experience...
Many Grant Thornton member firms provide a range of inspirational and generous services to the communities they serve.
Experienced hires
Students
Jobs at Kevane Grant Thornton
Familia Kevane reflects the sentiment that our partners and team members express about their experience in the firm and that steers the pillars that define our...
Emerging markets and shifting consumer demand are creating new opportunities in food and beverage, with business leaders investing in new products, markets and...
Optimism is slowly returning to the global economy, but the financial services industry needs to regain the trust of public and private bodies. To succeed,...
At Kevane Grant Thornton we provide services to the Healthcare industry
Rapid change and complexity are norms, and innovation the fuel in the technology industry. Today’s revolutions – including cloud, as-a-service, social media...
At Kevane Grant Thornton we provide services to the Industrial products industry.
Across the globe, not for profit organizations are increasingly expected to deliver more, while at the same time facing cuts in government funding and...
We work with all types of agencies, including central and state government, local government, donors (including bilateral and multilateral international...
While the impact of the prolonged downturn continues to be felt, pockets of opportunity and optimism have emerged within the retail estate and construction...
At Kevane Grant Thornton we provide services to the Services industry.
Dynamic businesses need to move with speed and purpose if they want to capitalise on opportunities in hospitality and tourism. At Grant Thornton, we know...
The Puerto Rico Treasury Department (PRTD) has determined that the type of report that must be attached to the Income Tax Return at the time of its submission, to comply with Section 1061.15 of the Puerto Rico Internal Revenue Code of 2011, (PR IRC), will be an Agreed Upon Procedures (AUP).
Contents
On December 18, 2020, the PRTD issued Circular Letter No. 20-39 (CC 20-39) to establish the type of report that must be included with a taxpayer’s Income Tax Return and establish the scope of the procedures that a Certified Public Accountant with a valid license to practice his profession in Puerto Rico (CPA) must follow to prepare the report in order to comply with Section 1061.15 of the PR IRC.
As per Section 1061.15(c) of the PR IRC, the requirement to submit Audited Financial Statements (AFS) depends on the volume of business the entity had during the period covered by the return. Entities with a volume of business equal to or greater than three million dollars ($3,000,000), but less than ten million dollars ($10,000,000), have the option of submitting an AUP or a Compliance Attestation, prepared by a CPA, instead of AFS. CC 20-39 establishes that an AUP pursuant to the procedures described in such communication is the report to be submitted with the income tax return instead of the AFS. Therefore, taxpayers must choose between submitting their return with AFS or an AUP. This requirement applies to tax years beginning after December 31, 2019.
Furthermore, entities with a volume of business equal to or greater than one million dollars ($1,000,000), but less than three million dollars ($3,000,000), can voluntarily submit an AFS or an AUP with their return to receive a total or partial waiver on withholding for services rendered. The option to submit an AUP instead of AFS is available for tax years beginning after December 31, 2019.
Members of a group of related entities that are subject to the determinations set forth on Section 1061.15(a)(5) of the PR IRC, but that do not have a volume of business greater than one million dollars ($1,000,000) during the tax year, are not required to submit AFS. Such entities are required to submit an AUP, as long as they decide to not submit AFS.
If a taxpayer does not include an AUP with its return as required, the PRTD will deem the return as incomplete and consider it not filed until the AUP or AFS are submitted, and the taxpayer may be subject to penalties for late filing. The requirement to submit an AUP under Section 1061.15 of the PR IRC will apply to tax years beginning after December 31, 2019.
Taxpayers may decide to submit AFS, even when not required. The AFS must be accompanied by the Schedules of Supplementary Information (SSI), and other documents used to prepare the financial statements. If an entity decides to submit AFS along with the SSI with its return, they will not be required to submit an AUP. This option is available for taxpayers with a volume of business less than ten million dollars ($10,000,000). Members of a group of related entities will have this option as long as their volume of business does not exceed one million dollars ($1,000,000).
Please be aware that, AUP’s requirement, established on Section 1061.15 of the PR IRC (AUP CC 20-39), is different than the report required by Sections 1021.02(a)(2)(D) and 1022.04(a)(7)(B) of the PR IRC, and on the PRTD’s Circular Letter No. 19-14 (AUP CC 19-14), in order not be subject to limitations on the determination of the alternate basic tax net income or alternative minimum tax net income. Taxpayers that submit an AUP CC 20-39, do not need to submit an AUP CC 19-14.
In general terms, AUP CC 20-39 extended the scope of procedures to support the revenue and deductions claimed in the return, both in compliance with the filing and payment of the monthly sales and use tax returns and informative returns. In addition, AUP CC 20-39 requires the recalculation of tax depreciation and amortization, reconciliation of informative returns with expenses in books, vouching of expenses not reported in informative returns, and review of related entities due to/from accounts.
Taxpayers must decide which report will be submitted with their 2020 income tax return depending on the options available. The decision is not only based in cost reduction but in scope of work, time to be incurred and the additional usefulness of the report for the business.
The following chart summarizes all the requirements and thresholds regarding the requirement to submit an AUP or AFS:
|
Section 1061.15 – General Rule |
Requirement for tax years commencing after December 31, 2019 |
|
Volume of Business: Less than $1,000,000 |
No AFS required. Voluntary submission of AUP CC 19-14 not to be subject to ABT and AMT limitations.
AUP CC 20-39 could be used instead of AUP CC 19-14. |
|
Volume of Business: Equal or greater than $1,000,000 but less than $3,000,000 |
No AFS required. Voluntary submission of AUP CC 19-14 not to be subject to ABT and AMT limitations.
Voluntary submission of AFS or AUP CC 20-39 to obtain full or partial waiver on withholding for services rendered (Section 1062.03)
AUP CC 20-39 could be used instead of AUP CC 19-14. |
|
Volume of Business: Equal or greater than $3,000,000 but less than $10,000,000 |
Option to submit AFS or AUP CC 20-39. |
|
Volume of Business: Equal or greater than $10,000,000 |
AFS required. |
|
Section 1061.15 – Related entities |
|
|
Aggregated Volume of Business: Equal or greater than $10,000,000 (related entities and persons) |
Members - less than $1,000,000, no AFS required. AUP 20-39 required unless AFS are submitted.
Members - equal or greater than $1,000,000, stand- alone AFS requires listing in the notes all related entities engaged in trade or business in Puerto Rico. |
|
Supplemental information: |
|
|
Volume of business: Less than $10,000,000 |
Required to submit if electing to submit AFS instead of AUP CC 20-39. |
|
Volume of business: Equal or greater than $10,000,000 |
Required to submit. |
We are committed to keeping you up to date with all tax-related developments. Please contact our Tax Department should additional information be required regarding this or any other tax issue. We will be glad to assist you.
Jose Dávila
Tax Supervisor
Eduardo Carlo
Tax Semi Senior
Collaborated in the preparation of this article.
