The Personal Property tax return is due on or before May 15 in the regional office of the CRIM. A tax liability of $1,000 or more must be paid in four equal installments on the 15th of August, November, February, and May, upon filing.

Estimated tax payments are based on the lesser of 90% of the current year tax or 100% of the prior year tax paid. A 5% discount is available when the personal property tax is duly paid.

Taxable personal property as reported in the Personal Property tax return includes deposits on hand or in transit as of 12/31, monthly average inventories, materials and supplies, furniture and fixtures, and machinery and equipment used in the trade or business other than vehicles (“Taxable Property”).

Any person or entity engaged in trade or business in Puerto Rico who owns Taxable Property is subject to personal property tax in the municipality where the Taxable Property is located, unless exempt. Although intangible property is exempt, computer software is considered Taxable Property.

The annual tax is assessed on the greater of the net book value of Taxable Property or minimum residual value of such property as of January 1st, as applicable. Minimum residual value replaces the cost basis of substantially depreciated items.

The tax rates vary by municipality. A 3-month extension is available. Loss of discount and penalties are imposed for amounts unpaid by May 15.

Surcharges of 5% are imposed on the unpaid balance due between 30 and 60 days, 10% on the unpaid balance due between 60 and 90 days, and 15% on the unpaid balance due above 90 days. In addition, a 5% penalty per month up to a maximum of 25% is imposed for late filing.

If gross receipts reach $3,000,000 or more, the personal property tax return must be reviewed by a licensed Puerto Rico CPA and accompanied by certified financial statements, an Agreed-Upon Procedures (AUP) report, or a compliance attestation report. Full audited financial statements are mandatory for entities exceeding $10,000,000 in gross volume.

The financial statements of foreign entities engaged in trade or business in Puerto Rico may reflect solely its operations in Puerto Rico, subject to specific municipal disclosure requirements. An income taxx return that does not include the required financial reporting documentation is considered incomplete, may be deemed not filed by the governing taxing authority, and may be subject to penalties.

Any person doing business in Puerto Rico must also consider annual tax return filing and Business Volume tax requirements, in addition to the Personal Property tax return.