March 1, 2021

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New provisions of the Federal Treasury are not directed to the Island | government

The Secretary of the Treasury Department, Francisco Parés Alicea, classified as productive the telephone meeting held today with the Assistant Secretary for Tax Policy of the United States Department of the Treasury, David J. Kautter, on the proposed regulation that, among other things, could alter the scope of the accreditation of contributions paid abroad and clarified that the new provisions are not directed to Puerto Rico.

“I thank Secretary Kautter and his work team in the tax policy area of ​​the Treasury, for having answered our call in less than 24 hours. This is the result of the close relationship that this administration has been building with its federal counterparts, especially with the Treasury. Kautter confirmed to us that the intention of the proposed regulation is not to affect the regime under Law 154, but rather that it is directed at certain taxes on digital services that are being imposed in other foreign countries ”, indicated the Secretary.

Parés Alicea stated that as previously indicated, the government’s fiscal team will have an active participation in the evaluation process. “This commitment began today, after holding a productive meeting on technical aspects of the proposed regulation. The support of AAFAF and its executive director, Omar Marrero, and the secretary of the Department of Economic Development, Manuel Laboy, has been essential to maintain an effective communication channel in this process both with the Federal Treasury and with the manufacturing sector ” he added.

At the meeting, the Treasury clarified that the proposed regulation is still in an early stage, and that it will take time before the final version is adopted. Likewise, they clarified that, at the moment, the determinations that the Federal Treasury has taken in relation to the accreditation of the contributions paid under the excise duty established in Law 154 of 2010 remain in force.

“I am optimistic about the demonstrations aired by Secretary Kautter, in which he pledged to continue collaborating with the government of Puerto Rico to provide transitory measures that allow orderly emigration toward an income tax system for these taxpayers, without adversely affect the island’s economy. This opening by one of the highest-ranking officials of the Treasury is a source of great satisfaction and we will ensure that this direct communication is maintained, so that we can ensure that our observations and recommendations are taken under consideration and accepted ”, said the secretary.

For her part, Governor Wanda Vázquez Garced stated that “we are very pleased with the response and good encouragement from Secretary Kautter to address our concerns. This action by the administrator proves once again that our administration managed to regain the trust of the federal government. We will remain vigilant and diligent to provide all the necessary information to achieve forceful actions for the benefit of Puerto Rico.

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