PUERTO RICO Law and Practice Contributed by: Simón Carlo Valentín, Anthony O. Maceira Zayas and Carlos M. Fontán, Maceira Zayas
8. Mutual Agreement Procedures and Arbitration 8.1 Availability and Legal Basis Puerto Rico does not independently administer a mutual agreement procedure (MAP) programme. Tax - payers generally must rely on US competent authority procedures where a US treaty is relevant to the tax - payer’s US federal position, recognising that Puerto Rico income tax is governed by local law. 8.2 Application Deadlines Puerto Rico does not have a local MAP application deadline because it does not administer a MAP pro - gramme. Where a US treaty MAP is pursued for US federal purposes, the applicable treaty typically gov - erns the MAP request timing. 8.3 Mandatory Binding Arbitration Puerto Rico does not provide mandatory binding arbi - tration as a local tax procedure. Puerto Rico does not have an advance pricing agree - ment programme comparable to those of major treaty jurisdictions. 9.2 Other Mechanisms Puerto Rico taxpayers commonly pursue tax certainty through: • incentive decrees under Act 60, which can lock in tax rates and agreed treatment for qualifying income streams, subject to compliance and sub - stance; • administrative consultations or rulings where avail - able under Puerto Rico Department of Treasury practice; and • robust transfer pricing documentation and inter - company agreements designed to withstand Puerto Rico audit scrutiny, especially for royalty, service and financing structures. 9. Dispute Prevention 9.1 Advance Pricing Agreements
tors evaluate criminal elements such as wilfulness and intent.
7. Administrative Co-Operation 7.1 Legal Framework for Administrative Co- Operation Puerto Rico does not independently participate in OECD or treaty-based administrative co-operation frameworks. In practice, international exchange of information relevance is largely mediated through US federal mechanisms and compliance regimes (such as FATCA), while Puerto Rico focuses on domestic enforcement and reporting. 7.2 Exchange of Information Clauses in Tax Agreements Puerto Rico does not maintain its own treaty exchange-of-information network. Information exchange affecting Puerto Rico taxpayers may occur indirectly through US federal exchange mechanisms, and through domestic information reporting and with - holding documentation collected by the Puerto Rico Department of Treasury. 7.3 Other Forms of International Tax Collaboration Puerto Rico does not independently participate in pro - grammes such as the OECD International Compliance Assurance Programme, joint audits or treaty-based co-ordinated compliance programmes. Multinational taxpayers may still experience “practical co-ordi - nation” pressures because global group audits and documentation (transfer pricing files, global minimum tax calculations) can drive the information Puerto Rico Department of Treasury requests during local exami - nations.
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