Puerto Rico - Q&As on effectively connected income source rule 

December 5:   Puerto Rico’s Treasury Department (Hacienda) released updated questions and answers (Q&As) concerning the application of the effectively connected income source rule.

Circular letter 12-10 (November 29, 2012) [PDF 1.08 MB] updates the list of Q&As concerning the application of the effectively connected income source rule for corporations, partnerships, and individuals that may be subject to the rule and/or the related excise tax.

Background

Legislation enacted in Puerto Rico (Act 154-2010) amended the rules for determining the income, gain or loss of a nonresident individual or a foreign corporation or partnership that is treated as having income effectively connected with a trade or business in Puerto Rico.


In 2011, the Puerto Rico tax authorities issued its first set of Q&As on the effectively connected income source rules. See TaxNewsFlash-United States: Puerto Rico: Q&As on the application of the new effectively connected income source rules




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