March 3, 2016 Puerto Rico issues guidance on mandatory electronic filing requirement for requesting an automatic extension of time to file income tax returns Puerto Rico's Treasury Department (PRTD) has issued guidance (Circular Letter (CL) 16-03), addressing how to request an automatic extension of time to file an income tax return. Under CL 16-03, taxpayers that intend to request an automatic extension of time to file an income tax return must electronically file Form SC 2644, Request for Extension of Time to File the Income Tax Return, unless the taxpayer qualifies for an exemption from the electronic filing requirement set forth in CL 16-02 (see Tax Alert 2016-0440). The PRTD cautions taxpayers that it generally will not grant requests for automatic extensions that are filed on paper. Noncompliance with the electronic filing mandate will result in late-filing penalties for failure to timely file an income tax return. Starting on February 26, 2016, individuals can electronically file a request for an automatic extension of time to file their income tax return through the PRTD's website, "Colecturia Virtual," while corporations and other entities may do so beginning March 14, 2016. Payments may be made electronically through "Colecturia Virtual" using ATH, VISA or Mastercard, or ACH debit methods. Payments may also be made with a copy of the electronic filing confirmation of the request for an automatic extension at any of the Collection Bureau Offices of the PRTD. In addition, the following individual taxpayers may file their automatic extension requests at Tax Return Preparation and Orientation Centers: — Salaried or retired individuals with income of $150,000 or less — Individuals with interest income that does not exceed the $2,000 exempt amount — Married individuals that complete Schedule CO Individual, Optional Tax Computation, with total income of $150,000 or less CL 16-03 provides that individuals that request an automatic extension, and are out of the country on the extended due date, may file an additional extension of time to file the return. The additional extension will not exceed three months and must be filed on paper, together with evidence to demonstrate that the taxpayer was out of the country. Partners in a partnership are not eligible for the additional extension. Implications Companies with operations in Puerto Rico that have been filing their automatic extension requests on paper should note this change in the rules and coordinate with their tax departments and tax service providers to ensure compliance with CL 16-03. ———————————————
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