TAX AND TAX INCENTIVES

For companies doing business in Puerto Rico, the local tax scenario can vary widely. Before you consider a manufacturing, green energy, agricultural, international financial entity, hotel or tourism project, or an export business, it pays to closely examine the set of local and applicable federal tax incentives and engage in careful tax planning. An attorney with in-depth knowledge of local and international tax regulations, exemptions, credits and incentives is an invaluable tool that can literally save your business millions of dollars a year

Adsuar Muñiz Goyco Seda & Pérez-Ochoa, PSC (“AMG”) has the experience, knowledge and skill useful to your business. We have worked with many companies seeking to take advantage of local tax exemptions, credits and incentives. We can work with you to structure organizations and transactions properly to ensure eligibility for optimum tax benefits, help you comply with all applicable tax laws and manage dealings with local government entities, including the Puerto Rico Industrial Development Company, the Puerto Rico Tourism Company, the Puerto Rico Treasury Department and local municipalities

Additionally, our tax attorneys have considerable expertise with the overall spectrum of Puerto Rico taxes, including but not limited to income, sales and use, excise, property and municipal license taxes. We can provide you with the tax advice you need to ensure the best tax benefits while ensuring compliance with local tax laws

We also negotiate closing agreements with the Puerto Rico Treasury Department, as well as obtain private letter rulings. In addition, we also assist clients with tax controversies at the Puerto Rico Treasury Department, local municipalities and the Municipal Revenue Collection Center (“CRIM” for its Spanish acronym) pertaining to real and personal property taxes.

Our tax attorneys also advise United States citizens residing in Puerto Rico and foreign countries on the United States Internal Revenue Service (“IRS”) voluntary disclosure alternatives for undisclosed offshore accounts and federal tax compliance, and provide tax reporting advice to brokerage firms and clearing houses

EMPLOYEE BENEFITS LAW

At AMG, we have been continuously assisting employers predominantly in the manufacturing, retail and service industries, plan fiduciaries and service providers with the design, adoption and compliance required for the successful offering and/or administration of employee benefit plans considering the interplay of federal and local legal framework in close adherence to the client’s needs.

Among other, we assist our clients with:

• Plan documentation for retirement programs, including employer sponsored plans and Keogh type plans, IRAs, statutory and nonstatutory stock options, stock purchase plans, and deferred compensation arrangements.
• Plan documentation for welfare programs, such as flexible benefit plans and health reimbursement arrangements.
• Filings and dealings with local and federal government agencies, including the Puerto Rico Treasury Department, the IRS, the United States Department of Labor, and the Pension Benefit Guaranty Corporation
• ERISA litigation and counseling.
• Plan administration and compliance with fiduciary responsibility.
• Drafting and execution of agreements with plan fiduciaries and service providers.
• Amendment and restatement of plan documentation to comply with applicable legislation and regulations.
• Legal and tax considerations of mergers and acquisitions.
• Handling of qualified domestic relations orders (QDROs) and other orders under ERISA.
• Claims procedures and civil actions regarding employee benefit plans.
• Pension and welfare programs under collectively bargained agreements.
• Non-qualified plans
• Interplay of these plans with government programs, such as the United States social security and Medicare, and the Puerto Rico unemployment, disability and workmen’s compensation insurance
• AMG’s skills as it pertains to employee benefits allow us to assist you when the outcome aimed is available; however, if is not, we can also help you with the design of an alternative or solution useful to your employees or clients.

ESTATE PLANNING, TRUSTS, WILLS AND INHERITANCES

Estate planning that considers the interaction of US and PR estate taxes, and PR’s inheritance laws, is not simple, especially for PR residents that have assets outside PR and those that were not born in PR. The assistance and advice of attorneys who have in-depth knowledge and experience with the applicable PR and US laws is invaluable to ensure the protection of your hard earned assets, for the benefit of your surviving spouse and other family members.

• Estate Taxes

  If you were born in Puerto Rico (“PR”), you pass away while domiciled in PR, and if all your assets are “located in PR” and not “located within the US”, your estate (i.e., your heirs) will not pay United States (“US”) or PR estate taxes (i.e., death taxes). This also applies to a person born outside PR that acquired his or her US citizenship “solely” by residence in PR. However, if any of these PR residents owns assets “located outside PR,” or assets “located within the US,” their estates will most likely be subject to PR and/or US estate taxes.

  If you were not born in PR, and did not acquire your US citizenship solely as a result of your residence in PR, you will be subject to US estate tax if the fair market value of your assets exceeds the then applicable US estate tax exemption amount. For these PR residents, the location of their assets is generally irrelevant.

• Inheritance Rules

  PR has forced heirship rules. This means that if you are domiciled in PR, you do not have much discretion on how, or to whom, most of your estate will be distributed upon your demise. In the absence of a will, if you have children, they are entitled to all of your estate; and if married, the surviving is only entitled to the widow’s right of dower (i.e., a life interest or usufruct over a portion of the estate) and 50% of the “community property assets,” if any.

  The PR forced inheritance rules also apply to PR real property owned by non residents of PR. These non residents are often surprised to learn that PR’s inheritance and estate tax rules differ markedly from those applicable in other states of the US, and that they should make special provisions for their PR real estate.

  A comprehensive estate plan, and properly drafted trusts and wills, secure the economic wellbeing of your surviving spouse and descendants, provides for an orderly administration and division of your estate, avoids conflicts among heirs, provides for the special needs of minors or some other heirs, and eliminates or reduces your US and PR estate tax exposure.

• Probate of Wills, Declaration of Heirs and Estate Tax Returns

  Estate planning concludes with the handling of estate matters after your demise. In addition, to facilitating and expediting this process, significant tax savings may be achieved by properly considering applicable provisions of law and electing the various options available when preparing the US and PR estate tax returns, and upon the distribution of assets among your heirs.

  Our expertise in these fields makes AMG the firm of preference for estate planning, trusts, wills and inheritances amongst high-net-worth individuals in Puerto Rico.