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Withholding to Non-resident recipients A withholding of income tax at
source is required to be made on payments of interest, rent, salaries, wages, participation in partnership profits, commissions, premiums, annuities, remuneration, compensation, dividends, or other fixed or determinable,
annual or periodical gains, profits and income (but only to the extent that any of the items constitute gross income from sources within Puerto Rico) to nonresident individuals, or nonresidents fiduciaries, or foreign
corporations and foreign partnerships, not engaged in trade or business within Puerto Rico. The Company would be required to withhold and deduct a tax there from at the following rates:
Nonresident individuals citizen of the United States
(Except on dividends) |
20% |
Nonresident alien individuals (NonUS citizen)
(Except on dividends and interest paid to a related person)* |
29% |
Nonresident fiduciaries |
29% |
General rule, foreign corporations and partnerships
not engaged in trade or business within Puerto Rico
(Except on dividends and interest paid to a related person) |
29% |
Dividend payments to foreign corporations
and partnerships not engaged in trade or
business within Puerto Rico |
10% |
Sales of property by nonresident aliens |
25% |
Dividend payments from corporations and
partnership engaged in the operations of
hotel manufacturing or shipping businesses,
or industrial development income |
10% |
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*
A foreign corporation is considered a related person if it owns 50% or more of stock or shares of the debtor. The following stock and shares shall be considered owned by a foreign corporation or partnership not engaged
in business in Puerto Rico: (1) those owned directly by the foreign corporation or partnership, (2) those owned
by a corporation or partnership where the foreign corporation or partnership holds 50% of the value of the stock or shares of such corporation or partnership, and (3) those held by a person that holds 50% or more of the
value of the stock or share of the foreign corporation or partnership.
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