Puerto Rico tax law has changed in the recent past to bring a new regime in regard to taxation. From the onset, it is sensible to have an insight to the meaning of tax before engaging on an in depth exploration on the alterations.
It is sensible enough to build some background on taxation in order to clearly demonstrate the modifications. Tax is a mandatory payments made by the citizens and the businesses from their earnings to the government, with an intention of raising revenue for the government. It is important that taxes are paid to the government in order to enable it to operate effectively and to dispense its functions with ease.
The changes include the following. The initial one is tax on the gross income. There is an alteration on the tax on these which forms part of the AMT. The new change affects the big companies and financial institutions. Some of these big companies include the following, commission agents, advertising companies, banks, to mention but a few.
Secondly, there is also another modification on the measures on other corporate income tax. For instance, insurance companies under the modification are now required to pay tax on their premiums at the rate of one percent. The income tax rate has also been reinstated with the highest being set at 39%.
In regard to alternative minimum tax, the rate has been increased. There are now several various computations which are made in determining the alternative minimum tax. Expenses incurred outside Puerto Rico are exempted from this new change upon determination by the secretary. The exemptions are also granted to businesses operating under tax insensitive legislation.
The other alteration is on alternative minimum tax commonly known as AMT. The new change has brought about a new various parallel computations which must be made in determining the existence of AMT. Tax payers have a lie way of seeking redress from the secretary for exemption to this alteration.
The other alteration worth talking about is tax paid on use and sale. The changes are made in the reseller exemption and also in the services offered by one business to the other business.
It is worth noting that the modification in the Puerto Rico tax law changes the previous taxation regime as a whole.
It is sensible enough to build some background on taxation in order to clearly demonstrate the modifications. Tax is a mandatory payments made by the citizens and the businesses from their earnings to the government, with an intention of raising revenue for the government. It is important that taxes are paid to the government in order to enable it to operate effectively and to dispense its functions with ease.
The changes include the following. The initial one is tax on the gross income. There is an alteration on the tax on these which forms part of the AMT. The new change affects the big companies and financial institutions. Some of these big companies include the following, commission agents, advertising companies, banks, to mention but a few.
Secondly, there is also another modification on the measures on other corporate income tax. For instance, insurance companies under the modification are now required to pay tax on their premiums at the rate of one percent. The income tax rate has also been reinstated with the highest being set at 39%.
In regard to alternative minimum tax, the rate has been increased. There are now several various computations which are made in determining the alternative minimum tax. Expenses incurred outside Puerto Rico are exempted from this new change upon determination by the secretary. The exemptions are also granted to businesses operating under tax insensitive legislation.
The other alteration is on alternative minimum tax commonly known as AMT. The new change has brought about a new various parallel computations which must be made in determining the existence of AMT. Tax payers have a lie way of seeking redress from the secretary for exemption to this alteration.
The other alteration worth talking about is tax paid on use and sale. The changes are made in the reseller exemption and also in the services offered by one business to the other business.
It is worth noting that the modification in the Puerto Rico tax law changes the previous taxation regime as a whole.
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