P.R. Laws tit. 13, § 30073
(a) General rule.— It shall be imposed, collected, and paid for each corporation (except foreign corporations not engaged in trade or business in Puerto Rico whose election under § 30441(d) of this title) for each taxable year, in addition to any other tax imposed by this part, a tax equal to the excess (if any) of:
(1) The tentative minimum tax for the taxable year, over
(2) the regular tax for the taxable year.
(b) Tentative minimum tax.— For purposes of this section, the term “tentative minimum tax” for the taxable year shall be the greater of:
(1) The sum of the following:
(A) Thirty percent (30%) of so much of the alternative minimum net income excess for the taxable year, reduced by the alternative minimum foreign tax credit for the taxable year, and
(B) except in the case of a finance business, as defined in § 30090(e) of this title, the surtax on gross income set forth in § 30090 of this title, or the distributive share of the special tax on gross income provided in said section that has been determined in accordance with §§ 30332 and 30556 of this title; or
(2) The sum of the following:
(A) Twenty percent (20%) of:
(i) The amount of expenses incurred or paid to a related party (as such term is defined in § 30045(b) of this title) if such payment is not subject to income tax or withholding at the source under this Code in the taxable year during which such expenses were incurred or paid; and/or
(ii) the amount of the transfer of costs or allocation of expenses of a Home Office located outside of Puerto Rico to a branch, if such item was not subject to income tax under §§ 30041 et seq. of this title,
(iii) However, the Secretary may evaluate, under such rules and regulations as he/she promulgates and at the request of the taxpayer, which shall be submitted within the first taxable year included in the request, the nature of the expenses or costs paid to a related party or home office in order to determine if any of such expenses or costs shall be exempt from the twenty percent (20%)-tax imposed in this paragraph; Provided, That such exemption shall apply only for a maximum of three (3) taxable years; however, the taxpayer shall be entitled to submit a request for subsequent terms after such term has expired, and that, for taxable years beginning after December 31, 2014, the total expenses that may be excluded from the provisions of this paragraph shall not exceed sixty percent (60%) of the total expenses subject to said rate, except in the case of entities subject to the provisions of §§ 1 et seq. of Title 7, known as the “Banking Law” or entities organized or authorized under the National Bank Act doing business in Puerto Rico, which may exclude up to one hundred percent (100%) of the expenses subject to the rate provided in this paragraph as determined by the Secretary,
(B) The amount determined in applying the percentage provided below to the value of any personal property acquired by the related party and/or the amount determined in applying the percentage provided below to the transfer of personal property from a home office located outside of Puerto Rico to a branch engaged in trade or business in Puerto Rico:
(i) General Rule: two percent (2%);
(ii) Exceptions:
(I) Point five percent (.5%) of the purchase or transfer of property that is subject to the provisions of §§ 32401 et seq. of this title;
(II) point five percent (.5%) of the purchase or transfer of property that is subject to the provisions of §§ 31626 and 31627 of this title; and
(III) one point five percent (1.5%) of the purchase or transfer of property that is subject to the provisions of §§ 31628 of this title, and
(C) Except in the case of a finance business, as defined in § 30090(e) of this title, the surtax on gross income provided in § 30090 of this title, or the distributive share of the special tax on gross income provided in said section that has been determined in accordance with § 30332 or 30556 of this title.
(c) Definitions.— For purposes of this section:
(1) Alternative minimum net income.— For purposes of this section, the term “alternative minimum net income” means the net income subject to normal tax for the taxable year, as defined in § 30071(a) of this title, determined on the basis of the adjustments provided in § 30074 of this title.
(2) Regular tax.— For purposes of this section, the term “regular tax” means the regular tax liability for the taxable year, as established in §§ 30071 and 30072 of this title, reduced by the credit granted by § 30201 of this title.
(3) Exemption amount.— For purposes of this section, the term “exemption amount” means the amount of fifty thousand dollars ($50,000) (but not to less than zero), reduced by twenty-five percent (25%) of the excess of the alternative minimum net income in excess of five hundred thousand dollars ($500,000).
(4) Personal property.— The term “personal property” means tangible personal property used or to be used in connection with the operation of a trade or business in Puerto Rico, except for raw material and intermediate products to be used by the acquirer in manufacturing process in Puerto Rico.
(5) Value of the personal property.—
(A) General rule.— If a bill is rendered to the taxpayer, the amount on which the tax shall be determined shall be the sum collected for the property included in the bill.
(B) If no bill is rendered.— If the taxpayer acquires personal property in a transaction in which no bill is rendered, the amount on which the tax shall be determined shall be the fair market value of such property.
(6) Gross receipts.— The term “gross receipts” shall mean the total amount earned or accumulated from the sale of property held for sale in the ordinary course of a trade or business or the income derived from all other sources.
(d) Exceptions for the tentative minimum tax in subsection (b)(2)(B) of this section.— The tentative minimum tax imposed by subsection (b)(2)(B) of this section shall not apply:
(1) When the acquirer of the personal property has gross receipts derived from the exploitation of a trade or business in Puerto Rico of less than ten million dollars ($10,000,000) for any of the three preceding taxable years or that portion of such period in which the acquirer is in existence.
(2) To the personal property acquired for tax-exempt operations under a tax exemption decree under § 10641 et seq. of this title, or any previous or subsequent similar law, and that is used in such tax-exempt operations.
(3) When the acquirer or any member of the controlled group of which he/she is a member is subject to excise taxes provided in Chapter 7 of Subtitle B of Act No. 120-1994, as amended, known as the ‘Puerto Rico Internal Revenue Code of 1994.
(4) When the Secretary determines that the value of the personal property purchased by the taxpayer from the related party or transferred by a home office located outside of Puerto Rico to a branch engaged in trade or business in Puerto Rico, is equal or substantially similar to the value for which such related party sells such property to an unrelated party. Provided, that when the foregoing is established to the satisfaction of the Secretary, he/she may fix a tax rate lower than the rate provided in subsection (b)(2)(B) of this section, which shall never be less than point two percent (.2%), except for property subject to the provisions of §§ 31626 and 31627 of this title, in which case the Secretary may fix an income tax rate lower than point two percent (.2%).
The Secretary shall prescribe by regulations the documents and conditions to be met, including an agreement between the seller and the purchaser that allows the Secretary to audit the price of the items acquired from the third unrelated party, which shall be filed by the taxpayer to qualify under this exception. However, it shall be necessary to submit a transfer pricing study.
(5) In the case of the acquisition of a personal property from a related party in tax-exempt exchanges under §§ 30041 et seq. of this title, or incidental to the sale or exchange of all or substantially all of the assets of a business outside the ordinary course of business.
(6) In the case of the acquisition or transfer of tangible personal property, if the seller is subject to income tax in Puerto Rico in such transaction.
(e) Anti-abuse rule.— For purposes of the tentative minimum tax in subsection (b)(2) of this section, no transaction, or series or transactions the principal purpose of which is to avoid the application of this section, including but not limited to, the use of corporations, partnerships, and other affiliated entities, the use of other commission arrangements, or the use of any plan resulting in the non-application of this section shall not be deemed to be valid, and any transaction in which market prices with respect to a personal property are not used shall be rendered invalid.
(f) Any dispensation, administrative determination or final agreement entered into or issued by the Secretary in relation to the tentative minimum tax shall continue in effect during the taxable years for which they were entered into or issued. If a dispensation applies to taxable years beginning after December 31, 2014, the applicable rate under subsection (b)(2)(B) of this section shall be that established in the dispensation or that resulting from said subsection, at the option of the taxpayer. The Secretary shall not issue, after May 28, 2015, new administrative determinations or final agreements in relation to the item established in subsection (b)(2)(B) of this section for taxable years beginning after December 31, 2014.
History —Jan. 31, 2011, No. 1, § 1022.03, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 12; Aug. 16, 2012, No. 189, § 1; June 30, 2013, No. 40, § 12; Sept. 30, 2015, No. 159, § 1.