A Focus On Puerto Rico’s Tax Climate

In light of recent sales tax changes, this month, we’d like to take you to the Caribbean and discuss the Puerto Rico tax climate. An archipelago, it consists of the main island and a number of smaller ones, including Vieques, Culebra and Mona. Not every island is populated year-round, but many are popular tourist destinations.

Collectively known as the “Island of Enchantment,” Puerto Rico features beautiful sandy beaches, gorgeous tropical forests, coral reefs and balmy weather.

The islands were first populated by the Taíno, an indigenous Caribbean ethnic group, before being colonized by the Spanish following Christopher Columbus’ arrival in 1493. It remained in Spanish hands until the Spanish-American War, when it was ceded to American control with the signing of the Treaty of Paris of 1898.

As an unincorporated territory of the U.S., Puerto Ricans are U.S. citizens and can move freely between the island and the mainland. However, it does not have a vote in the U.S. Congress and is only represented by one non-voting member in the House of Representatives, referred to as a resident commissioner. Various taxes in Puerto Rico are often similar to those in the U.S., but can have significant changes based on local law.
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WASHINGTON –– The Internal Revenue Service is reminding victims of Hurricane Maria in the U.S. Virgin Islands and in the Commonwealth of Puerto Rico that filing and payment activities have been further postponed beyond Jan. 31, 2018.

The IRS extended tax deadlines for affected individuals and businesses until June 29, 2018, for the following localities:

  • In the U.S. Virgin Islands (starting Sept. 16, 2017): Islands of St. Croix, St. John and St. Thomas.
  • In Puerto Rico (starting Sept. 17, 2017): In any of the 78 municipalities.

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