In Informative Bulletin (IB) 16-01, Puerto Rico's Treasury Department (PRTD) has issued guidance on the filing of income tax returns and other documents for large taxpayers.

Background

Act No. 72-2015 added the term "large taxpayers," a new type of taxpayer, to Section 1010.01(a)(35) of Puerto Rico's Internal Revenue Code. The term is defined as taxpayers that are engaged in a trade or business in Puerto Rico and are either: (1) a commercial bank or trust company; (2) a private bank; (3) a brokerage or securities house; (4) an insurance company; (5) a telecommunications company; or (6) an entity with a volume of business of $50 million or more in the previous tax year.

Act No. 72-2015 also granted the Secretary of the Treasury (Secretary) the authority to establish the form, manner and place in which large taxpayers must file their income tax returns, as well as other returns or forms for tax years beginning after December 31, 2014.

IB 16-01

For tax years beginning after December 31, 2014, large taxpayers must file their income tax returns, attachments and extensions in person or by certified mail with return receipt at the following addresses:

Physical address (for filing in person)

Puerto Rico Treasury Department
Large Taxpayers' Unit
Intendente Ramírez Building
10 Covadonga Street
Office 724-A
San Juan, Puerto Rico 00901

Mailing address (by certified mail with return receipt requested)

Puerto Rico Treasury Department
Large Taxpayers' Unit
PO Box 9024140
San Juan, Puerto Rico 00902-4140

The PRTD indicates that informative and other returns that taxpayers are required to file electronically should continue to be filed electronically. Income tax returns and extensions that are not filed in accordance with the provisions of IB 16-01 will not be considered filed and taxpayers will be subject to penalty for failure to file a return or statement.

Implications

Companies with operations in Puerto Rico that have been filing their income tax returns routinely on the applicable due dates should take notice of this change in the rules on the manner and place to file the 2015 returns; and coordinate with their internal resources and tax service providers to comply accordingly.

Furthermore, it has been most recently announced in public media that the Secretary formed the Large Taxpayers Unit as a separate office with tax analysts and technicians dedicated to monitoring this specific group of taxpayers. It has also been announced that the Secretary has already identified a list of large taxpayers, and from this group, a certain number of large taxpayers have been selected to start a round of audit examinations.

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