Any taxpayer with an assessed tax debt—or that filed a return and, as of December 31, 2012, has outstanding tax debts—is eligible to request participation under the tax amnesty program.
The deadline for requesting amnesty is June 30, 2013. Taxpayers seeking to participate in the new tax amnesty program must file their amnesty requests between May 13, 2013, and June 30, 2013.
Types of taxes subject to amnesty
The types of tax covered by the amnesty program are:
- Income taxes
- Estate and gift taxes
- Excise taxes
- Sale and use taxes
- Withholding of income tax at source
- Taxes under any other act of similar nature that imposes a special income tax rate
Any taxpayer convicted of or under a criminal investigation for fraud, organized crime, or crime of tax nature will not be eligible to participate in this tax amnesty program.
Relief under the tax amnesty program
The tax amnesty program provides the following relief measures.
- Accumulated and applicable interest, surcharges, and penalties will be waived if principal payment of the tax liability is made in full.
- If the taxpayer does not pay the tax liability in full, applicable interest, surcharges, and penalties will be waived only if there is an agreement for an installment payment plan with the Puerto Rican Treasury. The installment plans available are
- A one-year installment plan, requiring a down payment of 10% of the amount of the tax liability with the remaining principal paid within a 12-month period, with no assessment of interest
- A two-year installment plan, requiring a down payment of 10% and the remaining principal paid within 24 months, subject to a 5% rate of annual interest
- A three-year installment plan, requiring a down payment of 10% and the remaining principal paid within 36 months, subject to a 7% rate of annual interest
- A four-year installment plan, requiring a down payment of 10% and the remaining principal paid within 48 months, subject to a 10% rate of annual interest
Tax years covered
Tax amnesty is generally available for tax years beginning before January 1, 2012. However, with respect to sales and use tax and withholding of income tax at source, the provisions of the tax amnesty program apply for periods ending before January 1, 2013.
There are additional terms and conditions for taxpayers to satisfy, in order to qualify for tax amnesty. Taxpayers with delinquent returns for periods ended on or before December 31, 2011, may seek to participate in the tax amnesty program, provided that (1) the taxpayer is current with all return filings; and (2) payment must be made in full, i.e., without the benefit of the installment plan options.
For more information, contact a tax professional with KPMG in Puerto Rico: