{"id":8558,"date":"2026-07-29T13:45:46","date_gmt":"2026-07-29T13:45:46","guid":{"rendered":"https:\/\/alvatax.com\/new\/?p=8558"},"modified":"2026-08-13T10:50:04","modified_gmt":"2026-08-13T10:50:04","slug":"puerto-rico-tax-amendments-effective-for-tax-years-beginning-on-january-1-2025-part-1-of-2","status":"publish","type":"post","link":"https:\/\/alvatax.com\/?p=8558","title":{"rendered":"Puerto Rico Tax amendments effective for tax years beginning on January 1, 2025 \u2013 Part 1 of 2"},"content":{"rendered":"\t\t
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Puerto Rico Tax amendments effective for tax years beginning on January 1, 2025 \u2013 Part 1 of 2<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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By: Jorge A. Guzm\u00e1n Negr\u00f3n<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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As the current tax season progresses, below is a summary of some of the laws approved during the year 2025 that will apply to the tax returns for the year beginning on January 1, 2025, is as follows:<\/p>

ACT 12-2025<\/u><\/strong><\/p>

Act 12-2025 amends the provisions of Act 107-2020, as amended, known as the Puerto Rico Municipal Code (CMUN), as follows.<\/p>

Audited Financial Statements Requirement<\/u><\/strong><\/p>

Provides that when a taxpayer files an automatic extension with the Municipal Revenue Collection Center (CRIM), the extension permits those who are required to submit audited financial statements or other documents prepared by certified public accountants to file those documents after submitting the personal property tax return, as long as the documents are filed within the period established by the Puerto Rico Internal Revenue Code of 2011 (CRI) for informative returns and income tax returns.<\/p>

ACT 64-2025<\/u><\/strong><\/p>

Act 64-2025 amends Act 60-2019 as amended, known as the Puerto Rico Incentives Code, (CINC).<\/p>

\u00a0Tax Exemptions for Corporations and Non-Profit Entities<\/u><\/strong><\/p>

\u00a0<\/strong>Act 64-2025 authorizes the Secretary of the Treasury Department to evaluate and grant, at the request of an interested entity, a tax exemption to those organizations recognized as non-profit entities under Section 501(c)(3) of the U.S. Internal Revenue Code, as amended, provided that the Secretary of Treasury determines that granting such exemption is in the best interests of Puerto Rico. The procedure and requirements applicable to such evaluation shall be established by the Secretary through circular letters or other generally applicable guidance.<\/p>

\u00a0<\/p>

In the case of religious entities expressly described in the Puerto Rico Internal Revenue Code, such entities shall be exempt from taxation without the need to submit a local application for exemption. If a certification is requested for such purposes, the Department of the Treasury shall issue the corresponding certification automatically and expeditiously, within a period not exceeding thirty (30) days.<\/p>

ACT 65-2025<\/u><\/strong><\/p>

Act 65-2025 amends the CRI, the CINC, the CMUN and, Act 164-2009, as amended, known as the General Corporation Law, (LCORP). \u00a0Act 65-2025 simplifies and standardizes various tax forms required for businesses in Puerto Rico.\u00a0 Some of the amendments of Act 65 are:<\/p>

\u00a0<\/p>

Due date of various income tax returns<\/u><\/strong><\/p>

Act 65-2025 amends the due date of the Informative Income Tax Return Pass-Through Entity (Form 480.2(EC), the Pass-Through Informative Income Tax Return \u2013 Composite (Form 480.10(SC)) and the Revocable Trust or Grantor Trust Informative Income Tax Return (Form 480.80(F)).\u00a0 The annual income tax return is now due no later than the last day of the third month after the close of the taxable year. That is March 31st<\/sup> for calendar year entities.<\/p>

Alternate Basic Tax (ABT) applicable to Individuals<\/u><\/strong><\/p>

Act 65-2025 eliminates the requirement for taxpayers using the accrual method of accounting, or those with a fiscal year end, to submit with their income tax return a reconciliation of the expenses recorded in their accounting books with the informative returns.\u00a0 Taxpayers still are required to prepare the reconciliation and keep it in their records, to support the deduction for ABT purposes. Also, Act 65-2025 allows the deduction of bank charges and electronic processing fees from income subject to ABT if these expenses are included in the required informative returns.\u00a0 Furthermore, it exempts the amounts distributed or made available to any participant or beneficiary of an exempt employee trust subject to the 10% tax rate provided by the CRI from ABT.<\/p>

Alternate Minimum Tax (AMT) applicable to Corporations<\/u><\/strong><\/p>

Act 65-2025 eliminates the requirement for taxpayers using the accrual method of accounting, or those with a fiscal year end, to submit with their income tax return a reconciliation of the expenses recorded in their accounting books with the informative returns. Taxpayers still are required to prepare the reconciliation and keep it in their records, to support the deduction for AMT purposes. Also, Act 65-2025 allows the deduction of bank charges and electronic processing fees from income subject to AMT if these deductions are included in the required informative returns.<\/p>

Act 165 allows the exclusion of the dividends received from domestic corporations, foreign corporations or corporations covered under an exemption decree, up to the amount that was not included in the net income for regular tax purposes, on the determination of the Alternative Minimum Net Income subject to AMT.<\/p>

\u00a0<\/p>

Branch Profit Tax \u2013 Foreign corporations engage in trade or business in Puerto Rico<\/u><\/strong><\/p>

Act 65-2025 excludes the income generated from activities covered under the CINC and any other prior or subsequent law that provides an exemption on distributions of dividends from the Branch Profit Tax.<\/p>

Audited Financial Statements \u2013 Group of related entities<\/u><\/strong><\/p>

Act 65-2025 eliminated the requirement to submit audited financial statements when the volume of business of an individual member part of a group of related entities is equal to or greater than one million (1,000,000) dollars but less than three million (3,000,000) dollars… Furthermore, Act 65-2025 eliminates the requirement to submit an Agreed Upon Procedure Report when the VOB of the individual member is less than one million (1,000,000) dollars.<\/p>

\u00a0 \u00a0Cash Basis Method<\/u><\/strong><\/p>

Act 65-2025 raised the volume of business threshold for eligibility to use the cash method of accounting from three million (3,000,000) dollars to ten million (10,000,000) dollars.<\/p>

Taxpayers who, for their last tax year beginning before January 1, 2025, used the accrual method and wish, for their first tax year beginning after December 31, 2024, to adopt the cash basis method, because they qualify under the new average annual gross income, may adopt it without having to request a determination from the Secretary to change their accounting method. For this purpose, the Secretary will establish, by regulation, administrative determination, circular letter, or general information bulletin, the tax effect of the change in accounting method.<\/p>

Informative Returns<\/u><\/strong><\/p>

Act 65-2025 requires entities providing financial services, including but not limited, to financial institutions, fund managers, retirement plan administrators and brokerage houses, to prepare informative returns for payments received after December 31, 2024 for bank charges, payment or payroll processing, or any charges related to financial services from another merchant.<\/p>

Corporate filing with the Puerto Rico Department of State<\/u><\/strong><\/p>

Act 65-2025 simplifies the requirement to file the annual corporation report with the Puerto Rico Department of State.\u00a0 Domestic and Foreign Corporations only need to pay the corresponding annual fee.\u00a0 This is similar to the requirement of filing that applies to a limited liability company.<\/p>

Filing date of Volume of Business Declaration<\/u><\/strong><\/p>

Act 65-2025 amends the CMUN, in the case of businesses covered by a tax exemption decree and that are subject to the filing of the Income Tax Return under the provisions of the CRI, the deadline for filing the Volume of Business Declaration will be five (5) business days following June 15 of each tax year.<\/p>

Personal Property Tax Return<\/u><\/strong><\/p>

Act 65 amends the CMUN to require that an audited financial statement be submitted with the personal property tax return when it is required to be filed with its income tax return or was voluntarily filed.<\/p>

Exempt Annual Report<\/u><\/strong><\/p>

Act 65-2025 provides that the annual report required for Exempt Businesses under the CINC, or under Act 22-2012 for tax years beginning after December 31, 2024, must be filed electronically with the Secretary of the Treasury as part of the Exempt Business income tax return, along with the corresponding payment of the fee. The Secretary of the Treasury may postpone the effective date of this requirement for one year.<\/p>

Treasury Department and Department of Economic Development and Commerce Administrative Determination No. 26-01<\/u><\/strong><\/p>

The Treasury Department issued Administrative Determination No. 26-01to postpone the effective date of the requirement to electronically file the Exempt Annual Report as part of the income tax return. Consequently, the requirement to electronically file the Exempt Annual Report as part of the income tax return, along with the payment of the corresponding fees, will apply to tax years beginning after December 31, 2025.<\/p>

ATBA\u2019s comments<\/u><\/strong><\/p>

Given the scope and importance of these laws, we recommend reviewing the changes and determining the impact on the tax planning and compliance strategies.<\/p>

At ATBA, our experienced advisors are eager to assist with these and other tax matters.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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