Puerto Rico Corporate Income Insights

Registration and Authorization

Before conducting business locally, all corporations or limited liability companies must register at the Puerto Rico State Department.


Puerto Rico corporations are treated as foreign corporations for U.S. income tax purposes. If a U.S. corporation decides to establish its operations in Puerto Rico through a Puerto Rico subsidiary, the latter will not constitute part of the consolidated group for purposes of U.S. income tax returns.


A foreign corporation (one that is organized under the laws of a country other than Puerto Rico) may engage in business in Puerto Rico as a division or branch of that foreign corporation or as a separate corporation or subsidiary. Resident foreign corporations are taxed in Puerto Rico on their Puerto Rico source income and on any effectively connected income at the same graduated tax rates as any domestic corporation.


Estimated Income Tax Payments

A business operating in Puerto Rico may also be required to make the estimated income tax payments due on the fifteenth (15th) day of the fourth, sixth, ninth, and twelfth month of the taxable year. Penalties are imposed for underpayment of the estimated tax.


Annual Corporation reports

Corporations registered at the Department of State of Puerto Rico are required to file an annual corporation report on or before April 15th of every year.


Corporate Income Tax Return

All corporations (including branches) doing business in Puerto Rico are required to file an income tax return on or before the fifteenth (15th) day of the fourth month following the close of its taxable year. LLC must file on or before the fifteenth (15th) day of the third month following the close of its taxable year if it is taxed as a pass-through entity.


Group Identification Number

Every group of corporations that are members of a group of related entities shall request a Group Identification Number from the Department of the Treasury. The number must be included in the space provided in each of the corporate income tax returns filed by the members of the group. The form may only be filed electronically through the online services of the Treasury Department website.


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