Puerto Rico Nonprofit Organization
Form a Puerto Rico tax-exempt organization
An exempt organization formed under the laws of Commonwealth of Puerto Rico must obtain an EIN, a merchant registry, and an exemption certificate from the Puerto Rico Treasury Department. Depending on the nature of activities and business volume, an organization may be exempt from filing Form 990. You can also find information on tax filing requirements for nonprofit entities under the Federal tax filing section. The organization is subject to Puerto Rico income taxes if it does not obtain the exemption certificate or earns unrelated business income.
Initiate the nonprofit exemption request
As noted, an exempt organization must formally request a tax exemption with the Puerto Rico Department of Treasury to be exempt from income tax. For a nonprofit exemption request, the application costs are based on historical and projected business volume (gross receipts) and due upon filing. An organization may request an expedited response from the Puerto Rico Department of Treasury by following the procedures set forth in Administrative Bulletin OE-OE-2025-018, issued April 4, 2025. These procedures require the entity to submit the following documents:
-
IRS 501(c)(3) certification (issued within the last 180 days).
-
PR Certificate of Incorporation or Authorization to Do Business.
-
Board of Directors info: at least 3 members, which comprise less than 50% family of the CEO or board president.
-
Board certification confirming services are provided to PR residents.
In summary, the government awards the income tax exemption within 60 days upon receipt.
The organization must be duly registered to request an income tax exemption. Generally, the Service categories must include: social, legal and advocacy of rights, educational and investigation, health, art and culture, recreational and sports, housing, environmental, economic, social and community development, donations, international activities, religious, institutional, or other services.
Bookkeeping and Tax Compliance
In the case of nonprofit organizations, the quorum for making agreements and decisions may not be lower than 1/3 of the members of the governing body.
A nonprofit organization must also file an annual corporation report in the same manner as a regular corporation, but in addition balance sheet and survey, it must report any change with respect to the principal category of its services or purposes, or to the particular type of corporation. The nonprofit organization must also keep books and other documents in Puerto Rico as a regular corporation.
Ready to Launch or Formalize Your Nonprofit?
Whether you’re just starting out or seeking tax-exempt status, our team helps Puerto Rico nonprofits navigate every step from exemption requests to ongoing compliance.
Avoid costly delays and focus on your mission. Schedule a consultation today and get expert guidance built around your organization’s goals: