New Model to Obtain Debt Certification and Distribution of Retirement Plan to Non-Residents of PR


The Treasury Department (TD) issued Internal Revenue Informative Bulletin 21-06 to inform that the Model SC 2921-Debt Certification on Sales and Use Tax has been discontinued as all tax debts are included within Model SC 2096-Debt Certification

All certificates and licenses issued by the TD through SURI must be validated at SURI’s main page:  There is no need to have an active account at SURI.  When accessing SURI’s main page, taxpayers may select the type of certificate, license or proof o filing they want to validate. 



Internal Revenue Circular Letter 21-20 (CC RI 21-20) established the procedure any non-resident of Puerto Rico must follow to prove that the distributions of his qualified retirement plan under the Federal Code and whose trust fund was created in a state of the USA are not subject to taxation in Puerto Rico. 

 Any participant or beneficiary that receives a distribution from a qualified retirement plan and that at the moment of the distribution does not reside in Puerto Rico is not obliged to pay taxes in the Island for such distribution.  Therefore, they are not subject to payment of income tax, nor to the requisites of income tax withholding at source.

However, in order to qualify for the tax exemption, the participant or beneficiary must submit to his employer the Federal Internal Revenue Service Form 8898- Statement for lndividuals Who Begin or End Bona Fide Residence in a U.S. Possession.  If Form 8898 does not apply to his case, then he must submit the following evidence to his employer or to the retirement management service provider to prove his change of residence:

  • A sworn statement under penalty of perjury that includes all personal circumstances that apply, such as: name, postal address, and date on which he became a resident of the current location.  In addition, he must present detailed information of the retirement plan, including an assertion that the plan is qualified under the Federal Code.  He must also include the USA state where the trust of the retirement plan was created. 
  • Evidence of any mail received by the participant at the current address outside Puerto Rico.
  • Copy of a valid identification (license and/or voting card) issued by any government entity of his new residence.

If the required evidence is not presented, the participant will be considered a resident of Puerto Rico. Therefore, he will be subject to any withholding and to the income tax payment required by Puerto Rico’s tax Code. 

These rulings will not apply to retirement plan distributions, qualified or not, that come from trusts created in Puerto Rico, even if the participant is no longer a bona fide resident of Puerto Rico.  These individuals must continue to file an income tax return and pay any taxes related to such distributions along with any Puerto Rico sourced income he continues to receive after moving outside the Island. 


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