P.R. Laws tit. 13, § 30121
(a) In general.— There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including:
(1) Except as provided in § 30271(l) of this title, a reasonable allowance for salaries or other compensation for personal services actually rendered;
(2) traveling expenses including amounts expended for meals, lodging, and entertainment other than amounts which are lavish or extravagant under the circumstances while away from home in the pursuit of a trade or business in accordance with the limit established in § 30137(e) of this title;
(3) expenses incurred or paid for the use of motor vehicles in relation to carrying on any trade or business, in accordance with the limits established in § 30127(a)(3) of this title, and
(4) In the case of an individual carrying on his/her own trade or business whose gross income does not exceed five hundred thousand dollars ($500,000), he/she shall be able to deduct the cost of health insurance, individual and family, as an expense of his/her trade or business, provided that said health insurance covers all employees, if any. In the case of those individuals opting for the provisions herein, they shall not be able to include the expense paid for health insurance under § 30135(a)(4)(B) of this title.
(b) Special rules.—
(1) One single principal trade or business.— An individual shall be entitled to claim deductions and allowances under subsection (a) of this section only with respect to one trade or business that constitutes his/her principal trade or business. Excess deductions and allowances of a principal business for a taxable year may be claimed against net income from one or more activities or businesses specified in § 30122 of this title for said taxable year. Any activity which by itself constitutes a trade or business but which is not the taxpayer’s principal trade or business shall be separately subject to the provisions of § 30122 of this title. A trade or business which for a taxable year constitutes the taxpayer’s principal trade or business shall be treated as such for all subsequent taxable years, unless such trade or business is discontinued or under any other circumstances that the Secretary may determine by regulations. In the case of husband and wife where each has a principal trade or business on their own, the same may be treated as a single principal trade or business for purposes of this paragraph with respect to any taxable year in which they file a joint return under the provisions of §§ 30043(a)(2) and 30241(b) of this title. The Secretary’s regulations shall also establish the rules and criteria to be followed in the determination of what constitutes the taxpayer’s trade or business.
(2) Charitable contributions by corporations and partnerships.— No deduction shall be allowable under subsection (a) of this section to a corporation or partnership for any contribution or gift which would be allowable as a deduction under § 30130 of this title were it not for the ten percent (10%) limitation therein contained and for the requirement therein that payment must be made within the taxable year.
(3) In the case of an individual carrying on any trade or business, he/she shall be entitled to a fifty percent (50%) deduction on gross income for the self-employment federal tax paid to the Internal Revenue Service on the income reported for the same taxable year.
(4) In the case of an individual carrying on his/her own trade or business whose gross income does not exceed five hundred thousand dollars ($500,000), shall be able to deduct the cost of health insurance, individual and family, as an expense of his/her trade or business, provided that said health insurance covers all employees, if any. In the case of those individuals opting for the provisions herein, they shall not be able to include the expense paid for health insurance under § 30135(a)(4)(B) of this title.
History —Jan. 31, 2011, No. 1, § 1033.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 25.