The Governor of Puerto Rico on April 16 signed House Bill No. 2419 into law as Act No. 40-2020 (Act 40), which includes several technical amendments to the Puerto Rico Internal Revenue Code of 2011, as amended (PR-IRC). In particular, Act 40 introduces a trading in commodities safe harbor for foreign corporations and nonresident individuals, increases the threshold for submitting audited financial statements with Puerto Rico income and personal property tax returns, and clarifies the date on which a partnership classification election becomes effective for entities that convert into limited liability companies (LLCs) during the tax year.
Act 40 also:
Many of the amendments to the PR-IRC under Act 40 have retroactive effect to tax years beginning after December 31, 2018. Taxpayers immediately should evaluate how these amendments may impact their 2019 Puerto Rico income tax reporting.