As a result of the additional time granted by the Puerto Rico Treasury Department (PRTD) for filing the 2017 income tax return (see Tax Alert 2018-0831 and Tax Alert 2018-0857), the due date for filing Puerto Rico's Volume of Business Declaration (VOBD) or the request for an extension of time to file the VOBD has also been extended from April 24, 2018 to May 2, 2018.

The Municipal License Tax Act of 1974 (MLTA), as amended, and its regulations establish that the VOBD is due five business days after April 15 or the date prescribed by the PRTD for the filing of the income tax return. On February 5, 2018, the Puerto Rico Management and Budget Office (OGP by its Spanish acronym) issued Circular Letter (CL) 150-17 to the Directors of Finance of all municipalities to confirm that VOBD for fiscal year 2018-19 was due on April 24, 2018.

In CL 154-18, issued on April 20, 2018, OGP corroborates that, based on the provisions of the MLTA and its regulations, the deadline for filing the 2018-19 VOBD or extension request will be May 2, 2018. Furthermore, CL 154-18 also confirms that the extended due date will be November 2, 2018.

Implications

Taxpayers interested in receiving a 5% discount off their municipal license taxes must pay the tax by May 2, 2108, when they file their VOBD or extension request. If payment is not made in full by the new extended due date, taxpayers will continue to have the option of paying in two equal installments on or before July 15, 2018 and January 15, 2019.

To be considered complete and timely filed, the final declaration must be accompanied by audited financial statements (gross revenues greater than $3 million) or a filed copy of the income tax return (gross revenues of $3 million or less).

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