DIEGO PERDOMO & COMPANY, PSC

CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS EST.1968

Tax Newsletter
January 26, 2011

Changes to Annual Report Filing per PR Department of State Regulation No. 7939 On November 10, 2010, the Secretary of the Puerto Rico State Department approved Regulation No. 7939 in order to set certain requirements for the filing and payment of the Corporate Annual Report starting on January 1, 2011.

Annual Report Electronic Filing Requirement:

According to Regulation No. 7939, the Corporate Annual Report must be filed and paid electronically through the Puerto Rico State Departments website: www.estado.gobierno.pr., or through the Puerto Rico governments website: www.pr.gov. Annual Reports sent by mail will not be accepted by the State Department.

If the taxpayer has limited or no access to the internet, the State Department will provide computer terminals on their locations so that the taxpayer could use them in order to file the report by electronic means.

If the taxpayer has a reasonable cause to file the report manually, an exception can be made if approved by the Secretary. In order to request such permission, a letter must be sent to the Secretary requesting permission to file the report manually and a fee of $30.00 must be paid with the request. The request shall be made no later than 15 days prior to the filing due date of the report. Paper filings will not be granted automatically, thus taxpayers must receive an approval in order to be able to file the report manually. However, if the taxpayer has not received a notification approving

METRO OFFICE PARK, LOT #15, STREET #1, SUITE 200, GUAYNABO, PUERTO RICO 00968-1705 PO BOX 363247 SAN JUAN, PUERTO RICO 009396-3247 TEL. (787)-793-4400 FAX: (787) 793-6056

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or denying the permission within 5 days prior to the due date, the request shall be considered approved.

Annual Report Electronic Payment Requirement:

The website will provide various alternatives for electronic payment, such as credit and debit cards. Please be aware that vouchers obtained from the PR State Department or the Treasury Department previously required to pay the filing fee, is no longer accepted as a payment. If the taxpayer obtains a voucher to pay the filing fee, the voucher must be validated in the State Department, and an electronic code would be provided, so that the report is filed and pay electronically.

Extension Request and Filing Fee: The 2010 Corporate Annual Report is due on April 15th, 2011. According to Act No. 164 of 2009, an extension of 60 days might be requested, which would allow corporations to file the report no later than June 14, 2011. Previous to this Regulation, the filing fee of $100 ($10 for non for profit) was required to be paid on the date the final report was due, but now it is required to be paid by April 15th, 2011, even if the taxpayer requests an extension.

If you have any questions, please contact our Tax Department at the e-mails shown below or at (787) 793-4400. You can access www.dpco.com for additional information. Carlos R. Vlez: cvelez@dpco.com Larissa Pelet: lpelet@dpco.com Oscar Rivera: orivera@dpco.com Carlos M. Perdomo: cperdomo@dpco.com Vctor Zayas: vzayas@dpco.com