#2021 puerto rico income tax brackets plus#

In this regard, some of these expenses must be reported in informative returns to be deductible. Such minimum tax is subject to an 18.5% flat rate, or 23% in the case of taxpayers with gross proceeds of USD 10 million or more.Ī corporation is not allowed to claim the same deductions it claimed for regular income tax purposes. Instead, a corporation is allowed to claim a limited amount of deductions such as wages, rents, utilities, marketing, depreciation, insurance, health plan contributions, charitable donations, bad-debts, and certain taxes. The AMT includes various AMT adjustments in order to calculate the tentative minimum tax. The determination of the applicable surtax rate is made on a consolidated basis for controlled groups and related companies, so the net taxable income of all the entities subject to tax in Puerto Rico within said groups has to be combined for the determination of the applicable surtax rate.

#2021 puerto rico income tax brackets plus#

USD 36,750 plus 19% of surtax net income in excess of USD 275,000 for a maximum nominal tax rate of nearly 37.5%.

5% for surtax net income up to USD 75,000.

The graduated surtax rates are as follows: The 'surtax net income' is basically the net taxable income subject to regular tax less a surtax deduction in the amount of USD 25,000. The current corporate income tax (CIT) rate is comprised of an 18.5% normal tax and a graduated surtax (computed on the 'surtax net income'). In the case of a non-resident foreign corporation, a 29% withholding tax (WHT) rate is applicable on its Puerto Rico-source gross income not effectively connected with a Puerto Rico trade or business.

A foreign corporation engaged in trade or business in Puerto Rico is taxed at the regular corporate tax rates on income from Puerto Rico sources that is effectively connected income. A domestic corporation is taxable in Puerto Rico on its worldwide income.