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Puerto Rico adopts significant amendments to its income tax code

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January 2019


The Governor of Puerto Rico on December 10, 2018 signed into law House Bill 1544 as Act 257-2018 (Act 257).  Act 257 amends numerous provisions of the Puerto Rico Internal Revenue Code of 2011 (PRIRC), including reducing the corporate and individual income tax rates, introducing a new earned income credit, limiting certain deductions, subjecting the gain on the sale of a PR partnership interest to PR income tax, changing certain sourcing rules, and amending the information reporting requirements.  Act 257 also amended certain sales and use tax (SUT) provisions.

The takeaway

Companies should monitor the current interactions between the Government of PR and the Oversight Board concerning Act 257 and its impact on the PR approved Fiscal Plan, as they might result in changes to Act 257.

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Maarten Maaskant

International Tax Desk Leader, PwC US

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