The Puerto Rico Government continues to issue administrative orders and determinations on the handling of the coronavirus pandemic. Puerto Treasury Department, Puerto Rico State Department and DACO, are a few of the government agencies issuing temporary orders. This is further to the mandatory business shutdown and citizen curfew declared by the Governor of Puerto Rico pursuant to Executive Order No. 2020-023 issued on March 15, 2020.

The Department of Economic Development and Commerce (“DDEC”, for its Spanish acronym), is expected to issue soon a Circular Letter to further clarify the extent of interpretation of EO 2020-023 as it pertains to the mandatory business shutdown, citizen curfew and applicable exemptions.  O&B continues to monitor developments and will provide new updates as they become available.

Puerto Rico Department of State: CORPORATE ANNUAL REPORTS

The Puerto Rico Department of State has extended the due date for filing the 2019 Corporate Annual Report (the “Annual Report”) from April 15, 2020 to May 15, 2020. An extension to file the Annual Report on or before June 15, 2020 may be purchased by making an advance payment for your Annual Report on or before May 15, 2020. An additional extension may also be purchased from April 16, 2020 through June 15, 2020 if the Annual Report has been prepaid.   Note: additional extensions will only be valid until July 15, 2020.

Puerto Rico Department OF TREASURY (“PR TREASURY”)

PR Treasury has issued various informative bulletins, circular letters and administrative determinations to deal with the Coronavirus threat. Below is a brief general summary of the matters discussed therein.

Internal Revenue Informative Bulletin No. 20-07 extends for an additional 120 days the term to question any mathematical error notices and an additional 90 days to file administrative appeals or present documents required by Treasury. Also, the period of effectiveness of debt revisions letters issued on or before March 12, 2020 is extended for an additional 120 days.

Internal Revenue Informative Bulletin No. 20-08 provides that no penalties will be imposed on informative returns not filed by the extended due date of March 31, 2020, if they are filed electronically through SURI no later than April 15, 2020. This applies to the following informative returns: 480.5, 480.6A, 480.6B, 480.6B.1, 480.6D, 480.6G, 480.6SP, 480.6SP.2, 480.7, 480.7B, 480.7B.1, 480.7C, 480.7C.1, or 480.7E. I.R. I.B. 20-08.  Note that this extension of time to file does not apply to the deposit of taxes withheld.

Administrative Determination No. 20-03 extends the due date to file the PR income tax returns generally due on April 15, 2020 and corresponding payment until May 15, 2020. The due date to file certain PR income tax returns (e.g., returns for conduit entities) that are generally due on March 15, 2020 and the corresponding payment was extended until April 15, 2020.

Administrative Determination No. 20-04 orders the immediate revocation of any internal revenue license for the failure to comply with Executive Order 2020-023, which orders the temporary cease of operations for any non-exempt business from March 15, 2020 at 6:00 p.m. to March 30, 2020. The revocation of the license will be effective for at least 6 months.

Administrative Determination No. 20-05 provides the following:

• The expiration date of internal revenue bonds and licenses expiring during the period of March 15 to March 31, 2020 will be automatically extended to April 30, 2020.
• The due date to file February’s Monthly Sales and Use Tax Return and deposit the corresponding sales tax is extended to April 20, 2020.
• Treasury will not impose penalties for failure to comply with the bimonthly deposit of sales and use taxes due in March, as long as the sales and use tax due is paid with March’s Monthly Sales and Use Tax Return.
• The due date to file any other tax return, declaration or form that is due during the period between March 15, 2020 and April 15, 2020, except income tax returns, will be automatically extended one month from original due date.
• Circular Letter No. 20-20 provides that payments due under approved Payment Plans are subject to a moratorium from March 16, 2020 until April 30, 2020.

Puerto Rico Departament of Consumer Affairs (“DACO”)

DACO has issued two price freeze orders, Order No. 2020-05 and Order No. 2020-06, for items of prime necessity to deal with the Coronavirus threat.

The covered items under Order 2020-05 are the following:  hand sanitizers; items for personal disinfection (such as soap, shampoo, and wet wipes); disposable handkerchiefs/tissues; face masks; isopropyl alcohol; disinfectants and antiseptics; articles to disinfect or clean the home (such as soaps, detergents, bleach, and disinfectants); vinyl gloves; analgesics, and medications that contain acetaminophen or ibuprofen (including tablets, suppositories, and liquid); anticold medications, including antihistamines; and any other article or service that a consumer might reasonably need to prepare or recover in this emergency situation.

DACO Order No. 2020-006 amends Order 2020-05 to add the following additional products to the price freeze: (i) canned and fresh food, including water, milk, coffee, baby formula, starches, grains, and nutritional bars. This does not include meats and other fresh foods; (ii) fuels, including gasoline, kerosene, diesel oil, and petroleum liquefied gas, as well as their components, analogous, substitutes and derivatives and any of their variants, all destined to produce energy; (iii) tanks and recipients to collect water and fuel; (iv) paper towels, toilet paper, and feminine hygiene products; and (v) any other article that a consumer can reasonably need to prepare or recover from an emergency situation.

If a supplier notifies a retailer or wholesaler of an increase in the price of any of these items, the retailer or wholesaler may increase the price of the product without the prior authorization of DACO as long as it meets certain compliance requirements.

Any retailer or wholesaler that wants to sell an item covered by the orders, and which it did not sell prior to the orders being in effect, may sell the same without prior authorization of DACO as long as it meets certain compliance requirements.

Furthermore, a freeze on the gross profit margin in the sale of gasoline, diesel, and liquefied gas is established at all levels of the distribution chain.

These orders will be in effect until the Secretary of DACO signs an order ending the price freeze.

REGISTRY OF THE PROPERTY OF PUERTO RICO

The offices of the Registry of the Property of Puerto Rico are currently closed. Nonetheless, the online registration system, Karibe, is working as of today. The online system allows searches regarding title, liens and others and the filing of documents. The filing of documents, however, would depend on the issuance of the certified copy (i.e., with the required stamps) of the corresponding public instrument. The recording and filing fees may be paid through a registered bank account or an accepted credit card.

Please note that the situation pertaining these guidelines is subject to change depending on the circumstances and the modifications or clarifications that may be made by the Governor to the Executive Order.

Puerto Rico Notary Inspection Office 

The Puerto Rico Notary Inspections Office (“ODIN,” by its Spanish acronym) notified that, effective Monday, March 16, 2020, until Monday, March 30, 2020, it will not be providing direct services to the public. This includes the General Registry of Notarial Competences (Powers of Attorney, Wills and Notarial Activity Reports), the Registry for Non-contentious Matters, Trusts and Pre-nuptial Agreements, and the Notary Archives for the districts of San Juan and Ponce, as well as their administrative offices. As a result, the issuance of certifications issued by such registries, as well as the issuance of certified or simple copies of public instruments filed in the aforesaid Notarial Archives, are suspended until March 30th, 2020. Any ongoing process regarding the voluntary submission of the notarial work as well as examinations of notarial work by the Inspectors were suspended.

Public instruments that require that they are notified to ODIN within a required statutory timeframe may be authorized during this period and notified to ODIN either via regular or certified mail, or, in the alternative, by email in digital format. 

For any questions or inquiries regarding this topic do not hesitate to contact us at info@oneillborges.com or your prime contact attorney at O’Neill & Borges.

Note:  Because of the general nature and informative purpose of this newsletter, nothing herein should be considered as legal advice or a legal opinion.  For further information about the contents of this newsletter, or should you need further assistance in connection with these matters, please contact any of the attorneys of the firm’s Corporate Tax Group.