Tax considerations are a significant factor in any business transaction.
The McConnell Valdés Tax Practice group is the only stand-alone tax group Puerto Rico - over a dozen seasoned attorneys who committed to helping some of the world’s leading companies minimize their tax burdens -- and maximize the benefits of doing business in Puerto Rico.
Our profound understanding of Puerto Rico tax laws and policy enables us to pinpoint potential tax issues even in a volatile market – so that clients can plan effectively for the future. We are well connected and maintain an active and results-driven tax lobbying group that focuses on all areas of tax and tax incentives legislation that affects our clients.
Superb strategists and problem solvers, our team of 17 seasoned attorneys is committed to helping some of the world’s leading companies minimize their tax burdens – and maximize the benefits of doing business in Puerto Rico. They are vastly experienced in handling complex commercial and financial transactions for both multinational corporations with Puerto Rico operations as well as for local companies.
Individual team members ranked among Chambers & Partners’ Leading Attorneys in the field are singled out as “excellent,” “knowledgeable and hands-on.” A number of our attorneys are also CPAs: this training is indispensable to our understanding of complex tax and business issues – and leads to innovative solutions and tangible cost efficiencies. Others of us gained valuable insights from prior experience working in the Puerto Rico Treasury Department.
Whether providing federal and local tax advice on the formation, operation, restructuring and disposition of business entities on the island, our team’s approach couples our understanding of client business needs with responsive, highly personalized service. Chambers & Partners Latin America praises the team’s ability to make clients feel “important,” while noting our ability to offer “impeccable” guidance on future tax-related developments.
Top-tier clients – from leading multinational companies to local entrepreneurial start-ups -- turn to us for assistance in establishing or relocating businesses in Puerto Rico. We are particularly experienced in handling tax issues for pharmaceutical, medical device, electronics, chemical manufacturing, software, green energy, export services companies and retail. We also regularly handle excise, municipal license, and income tax matters related to the import and distribution of petroleum and petroleum derivative products within and outside a foreign trade zone.
Our team regularly handles the tax aspects of our clients’ ongoing business endeavors, including real estate purchases and sales, mergers and acquisitions, joint ventures, e-commerce transactions, and year-end tax planning.
Ours is the broadest tax exemption group in Puerto Rico, and we regularly apply our detailed knowledge of Puerto Rico’s tax exemption incentives to help clients optimize their tax outlooks in industries ranging from manufacturing, agriculture to tourism.
We possess a singular proficiency in handling the intricacies of Act 154 as it applies to multinational manufacturing companies. We are equally experienced in representing our clients in competent authority proceedings with the Puerto Rico Treasury Department, the IRS, and/or foreign jurisdictions in order to prevent double taxation.
The firm’s stand-alone Tax Litigation Practice group carries the largest and most significant caseload in Puerto Rico and represents clients at every level and in every type of dispute resolution with tax authorities. We advocate on behalf of our clients before the United States Internal Revenue Service and Department of Labor, the Puerto Rico Treasury Department, The Center for the Collection of Municipal Revenue (CRIM) and various municipal taxing authorities. We boast a superlative success record in handling litigation matters from tax audits and examinations through administrative appeals and court proceedings.
We offer our clients cutting-edge counsel on:
Acts 20 and 22
The Individual Investors Act and the The Export Services Act provide opportunity for tax savings. Read More...
Our Employee Benefits practice is the largest of its kind in Puerto Rico, and is regularly called on to counsel clients on everything from retirement plans to executive compensation issues. Read More...
Sales & Use Tax
We provide up-to-the-minute accurate and practical sales and use tax counseling to a diverse group of business clients. Read More...
The broadest tax incentives practice in Puerto Rico, we work with clients from around the world that are seeking to develop and maintain businesses on the island. Read More...
The firm’s stand-alone Tax Litigation Practice group carries the largest and most significant caseload in Puerto Rico and represents clients at every level and in every type of dispute resolution with tax authorities. Read more...
Trusts & Estates
We offer creative advice and an array of services designed to not only meet each client’s unique estate planning and trust administration needs, but also to minimize future burdens. Read More...
Representative Clients & Matters
- Assisting in the negotiation of amendments of industrial tax incentives grant to classify products as novel to attain million dollar tax savings. We filed a Competent Authority Request and negotiated with the Puerto Rico Treasury Department a closing agreement on the Puerto Rico income tax consequences of IRS income reallocations to prevent double taxation [deletion]. We successfully assisted client in obtaining a closing agreement with the Puerto Rico Treasury Department granting unique tax credits under the Puerto Rico Internal Revenue Code related to the excise tax of Act 154 to multinational manufacturing companies in Puerto Rico. We also successfully assisted client in obtaining a closing agreement with the Puerto Rico Treasury Department attributing proceeds from a multi-million dollar IP litigation settlement in the U.S. to Puerto Rico and taxing at preferential rates.
- Representing a company in negotiation of a tax incentives grant with the Puerto Rico Industrial Development Company, Puerto Rico Treasury Department, and Department of Economic Development and Commerce to maintain operations in Puerto Rico in light of the negative impact of excise tax of Act 154. We assisted in the negotiation of incentives, as well as the negotiation, drafting and execution of grant documents, closing agreements, regulatory amendments and others. We filed a Competent Authority Request regarding the Puerto Rico income tax consequences of IRS and UK income reallocations, and started negotiations thereunder. We also successfully drafted and lobbied for legislation providing for pioneer product treatment carryover in the renegotiation process of an Act 135 tax incentives grant to an Act 73 grant. Since its enactment, this legislation has promoted significant economic activity in Puerto Rico.
- Providing tax advice on the divestiture of a client's Puerto Rico real estate properties into a real estate investment trust, including the lease back of stores to continue their retail operations. The transaction was part of a larger strategy to monetize about $2.7 billion of real estate assets in an attempt to integrate its retail business. Puerto Rico tax advice was provided in all areas of taxation, including income taxation of earnings attributable to a business owned through a multi-tiered partnership structure, sales and use tax consequences of transfer of operational assets, and income taxation of a foreign real estate investment trust.
- Actively engaging in lobbying efforts during the passage of legislation to enact the value added tax regime in Puerto Rico and the repeal of the business-to-business exemption under the sales and use tax regime. The services we provided included regular advice on the application and implementation of the new taxes, particularly on matters related to taxable transactions between related parties. We also provided advice in the income tax area with regard to the increase in the transfer pricing tax component of the computation of the alternative minimum tax, and the impact on the Puerto Rico operations of such changes.
- Advising a client on the design and structure of the Puerto Rico business model for the import, storage, blending and distribution of petroleum and petroleum derivative products in Puerto Rico to maximize tax benefits, including the use of local tax exemption and foreign trade zone benefits. We also provide strategic counsel and audit defense on municipal license tax matters, including litigation in judicial venues to establish a volume of business allocation formula for the sale of fuel stored in one municipality and delivered in another.
- Serving as a Puerto Rico tax advisor in the restructuring of major tourism resort, including handling complex negotiations with various government entities and multiple parties, and related tax planning. We also developed and led strategy on Puerto Rico tax aspects of these complex negotiations.
- Representing more than 30 United States and Puerto Rico retail companies in tax-related issues.
- Advising numerous high net worth individuals on the tax issues related to relocating to Puerto Rico, as well as structuring and establishing export service companies in the Island under Act 20-2012 and 22-2012.
- Assisting client with complexities of Puerto Rico taxation of e-commerce transactions and establishment of operations in Puerto Rico.
- Assisting two subsidiaries in challenging and litigating various multi-million dollar municipal license tax assessments. One of these assessments relates to a novel issue regarding the impact of federal (U.S.) income reallocations on the municipal license tax liability. We obtained a favorable judgment from the Puerto Rico Court of First Instance ordering the cancellation of the deficiency notice, which was affirmed by the Puerto Rico Court of Appeals.
- Currently representing clients in complex litigation against two municipalities challenging final notices of deficiency on the payment of municipal license taxes. The assessments relate to various novel issues regarding the municipal license tax exemption applicable to businesses located within a duly authorized Foreign Trade Zone, and to challenges of the long-standing Puerto Rico tax incentives programs by the municipal government.
- Assist client to challenge the constitunality of statutory provisions imposing on the acquisition personal property from related parties outside of Puerto Rico.
- Restructuring the defined contribution and defined benefit plans of a multinational client’s worldwide reorganization. We examined the proposed restructuring and related tax and ERISA implications to advise our client on how to proceed with the restructuring of the PR Plans and related establishment of new PR plans in complying with legal requirements. We drafted and revised related plan documentation, multiple resolutions, and negotiated trust and agency agreements.
- Structuring a spin-off from the U.S. Consolidated Retirement Plan (“Old Plan”) into a new PR Plan. This entails: (i) determining the best tax qualification scenario for the new PR Plan (PR only or dual qualified) and related implications, (ii) negotiating the terms of PR trust agreement and related documentation, (iii) the discussion and modification of Old Plan terms and drafting new PR plan document, (iv) qualifying Old Plan and new PR Plan with the Puerto Rico Treasury, (iv) determining which plan should continue maintaining retired Puerto Rico employees based on current residency and tax reporting issues, and (v) the revision of U.S. master trust provisions.
News & Publications
- McV serves as local counsel in Sears Holdings Corporation’s $2.7 billion transactionJuly 8, 2015
- Twenty-six McV Attorneys Recognized in Chambers & Partners Latin America GuideJune 22, 2015
- December 1, 2014
- New Tax AttorneysNovember 18, 2014
- McConnell Valdés launches Tax Litigation Practice TeamNovember 5, 2014
- New Capital Members electedSeptember 25, 2014
- Tax Co-Chairs AppointedAugust 5, 2014
- McConnell Valdés Named Puerto Rico's Tax Firm Of the YearSeptember 28, 2012
- An McV Tax AlertApril 25, 2018
- An McV Real Estate & Tax AlertJanuary 24, 2018
- An McV Government Affairs & Tax AlertDecember 19, 2017
- An McV Government Affairs AlertNovember 17, 2017
- An McV Tax AlertNovember 3, 2017
- An McV Tax AlertOctober 10, 2017
- An McV Tax AlertOctober 4, 2017
- An McV Tax AlertSeptember 29, 2017
- An McV Tax Litigation AlertAugust 24, 2017
- An McV Tax AlertAugust 16, 2017
- An McV Tax AlertJuly 31, 2017
- An McV Tax AlertJuly 19, 2017
- An McV Tax AlertJuly 5, 2017
- An McV Tax AlertJune 29, 2017
- An McV Tax AlertJune 21, 2017
- An McV Tax AlertMay 18, 2017
- An McV Tax AlertApril 19, 2017
- An McV Tax AlertMarch 21, 2017
- An McV Government Affairs and Tax AlertMarch 8, 2017
- An McV Tax AlertJanuary 9, 2017
- An McV Securities & Tax AlertDecember 19, 2016
- An McV Tax AlertOctober 26, 2016
- An McV Tax AlertOctober 5, 2016
- An McV Tax AlertOctober 4, 2016
- US Court of Appeals Affirms Victory for Wal-Mart Puerto Rico Against Discriminatory Alternative Minimum TaxAn McV Tax Litigation AlertAugust 29, 2016
- An McV Hospitality AlertAugust 11, 2016
- May 6, 2016
- March 8, 2016
- March 1, 2016
- January 7, 2016
- January 4, 2016
- Governor Files Bill to create Board for the Financial Supervision and Economic Recovery of Puerto RicoGovernment Affairs, October 21, 2015
- Tax Litigation, September 9, 2015
- PR Treasury Issues New Guidance on Sales and Use Tax Applicable to ServicesSeptember 2, 2015
- Paper Format Returns No Longer Available for Sales and Use Tax ReportingAugust 3, 2015
- Municipality of Carolina Grants Amnesty for Certain Municipal TaxesJuly 14, 2015
- Treasury Issues Guidelines on Returns of Taxable Items and Pre-Existing AgreementsJune 26, 2015
- Increase to Use Tax Bonds due to the enactment of Act 72-2015June 15, 2015
- Act 72 Amends the Puerto Rico Internal Revenue Code of 2011June 3, 2015
- Act 72 Amends the Puerto Rico Internal Revenue Code of 2011 - Part IIJune 3, 2015
- Tax Free Holidays AnnouncedJune 2, 2015
- Tax Reform House Bill 2482 Alert #3May 22, 2015
- Tax Reform House Bill 2482 Alert #2May 21, 2015
- Tax Reform House Bill 2482May 20, 2015
- Procedure to Benefit from the Tax AmnestyMay 14, 2015
- PR Supreme Court Holding Regarding Municipal Authority to Impose Municipal License TaxMay 13, 2015
- Puerto Rico Department of Treasury issues Administrative Determination 15-05April 6, 2015
- Act 44-2015April 1, 2015
- Incentives Act for the Payment of Taxes Prior to the Tax TransformationApril 1, 2015
- The Act to Transform Puerto Rico's Tax System: Individual and Corporate Income TaxFebruary 18, 2015
- The Act to Transform Puerto Rico's Tax System: Conduit EntitiesFebruary 13, 2015
- The Act to Transform Puerto Rico's Tax SystemFebruary 12, 2015
- January 28, 2015
- Electronic Payments of Estimated Personal Property TaxJanuary 26, 2015
- Tax & Retail, January 12, 2015
- Act. No. 238December 24, 2014
- Technical Amendments to the Puerto Rico Internal Revenue Code of 2011December 23, 2014
- Alternate Procedure for Filing Supplemental Information for Taxable Year 2013December 18, 2014
- PR Treasury Announces 2015 Retirement Plan LimitationsDecember 18, 2014
- Windsor Amendments Deadline ApproachingDecember 3, 2014
- New Private Equity Funds Act EnactedNovember 21, 2014
- Municipal License Tax Amnesty Approved by the Municipality of San JuanNovember 18, 2014
- Automatic Release of Imports RepealedNovember 17, 2014
- Electronic Remittance of the 2% Special Charge on Money TransfersNovember 12, 2014
- PR Treasury Publishes AD 14-26October 21, 2014
- PR Treasury Issues AD 14-25October 20, 2014
- Names of certain forms amendedOctober 9, 2014
- PR Treasury Issues AD 14-24September 22, 2014
- Puerto Rico Department of the Treasury publishes AD 14-23September 19, 2014
- Puerto Rico Department of the Treasury publishes AD 14-22September 11, 2014
- Further guidance on the filing and payment of the Sales and Use TaxSeptember 3, 2014
- IRS Revenue Ruling 2014-24September 2, 2014
- Supplemental Information to Financial Statements Postponed for Taxable Year 2013August 21, 2014
- Tax Prepayment on Accrued Value of Retirement Plan BenefitsAugust 11, 2014
- Guidance and temporary procedure for the filing and payment of the use tax on imported articlesAugust 7, 2014
- Puerto Rico Treasury issues important Administrative Determination and Circular LettersJuly 21, 2014
- Sales Tax Provisions AmendedJuly 11, 2014
- Act 77-2014 signed into lawJuly 3, 2014
- PR Treasury Issues Circular Letter 14-03July 3, 2014
- Sales Tax Holidays for Uniforms and School Supplies AnnouncedJuly 1, 2014
- House Bill 2041 proposes changes to sales and use taxJune 19, 2014
- Post-Windsor Amendments to Puerto Rico Qualified PlansJune 10, 2014
- Postponement of new use tax on inventory proposedJune 9, 2014
- House Bills 1919 and 1921 proposedMay 27, 2014
- Personal Property Tax: Electronic Filing RequiredApril 24, 2014
- Severance pay in connection with a reduction in force not subject to FICAApril 2, 2014
- PR Treasury Announces 2014 Dollar Limitations for Qualified Retirement PlansFebruary 12, 2014
- February 6, 2014
- Deadline to File Protective Refund ClaimFebruary 5, 2014
- “Effective Mechanisms for Tax Oversight Act” signed into law; administrative determination issued to postpone its effectiveness.December 31, 2013
- Additional Extension to File Request for Waiver for Gross Receipts TaxDecember 30, 2013
- New Property Tax AmnestyDecember 16, 2013
- Personal Property Tax: Quarterly Estimated Payments Required starting August 2014December 9, 2013
- Puerto Rico Treasury Department issues Circular Letter 13-23November 25, 2013
- House Bill 1568November 20, 2013
- Puerto Rico Treasury Department issues Circular Letter 13-22November 19, 2013
- New Regulation Amends Act 154 RegulationsNovember 5, 2013
- Governor signs House Bill 1473 into Law 117-2013October 18, 2013
- New Licensing Requirements for Medical Device ManufacturersOctober 10, 2013
- DOMA Impact on Puerto Rico Employers and the Administration of Retirement and Health Benefit PlansOctober 8, 2013
- Sales and Use Tax Exemption for Exempt Businesses under Tourism Development ActsSeptember 13, 2013
- Application of the Sales and Use Tax to Certain ServicesSeptember 13, 2013
- Guidance to Amendments to the Sales and Use TaxSeptember 12, 2013
- Informative Return Filing Date to Notify Credits ExtendedJuly 22, 2013
- New Puerto Rico Taxes: Significant changes made to the Puerto Rico Internal Revenue Code of 2011July 3, 2013
- Automatic Extension of time to file the personal property tax return for Limited Liability CompaniesJune 13, 2013
- Extension for the Adoption of Plan Amendments and Filing of Qualification RequestsJune 10, 2013
- Recent Developments in Employee BenefitsMay 9, 2013
- New Puerto Rico TaxesMay 2, 2013
- Act 12-2013 establishes Tax Amnesty programMay 1, 2013
- Process for Filing Electronic Preparation and Filing of Form 499 R-1B ImprovedApril 22, 2013
- Deadline Approaching for Filing Plan Restatements and Certain Specific AmendmentsApril 10, 2013
- Act 154 Excise Tax AmendedMarch 7, 2013
- Severance Pay in Connection with a Reduction in Force not Subject to FICAFebruary 5, 2013
- Excise Tax of Act 154-2010February 5, 2013
- PR Treasury Clarifies Rules of Taxation Applicable to Distributions made by Retirement PlansJanuary 30, 2013
- New Taxpayer’s Representatives Services Office at PR TreasuryJanuary 8, 2013
- Extension of Time to Adopt Retirement Plan Amendments and to File Requests for Qualification under PR Internal Revenue Code of 2011November 29, 2012
- Treasury Clarifies Limit on Deductions for Contributions to Trusts Funding Qualified Defined Benefit PlansNovember 12, 2012
- PR Treasury Issues Circular Letter to Establish Dollar Limitations for Qualified Retirement PlansNovember 12, 2012
- McConnell Valdés LLC Receives Tax Firm Of the Year AwardSeptember 28, 2012
- New Exception to Alternative Minimum Tax on CorporationsSeptember 19, 2012
- Administrative Determination 12-11September 7, 2012
- CRIM amends Regulation No. 7049August 28, 2012
- Act 118: Sales and Use Tax Exemption for Churches and Religious OrganizationsAugust 9, 2012
- Administrative Determination 12-10: Deductions Related to AutosAugust 9, 2012
- Act 128 eliminates Merchants and Businesses Mandatory RegistryAugust 9, 2012
- Two Bills in the Labor & Employment Law Area ApprovedJune 29, 2012
- Deadline Approaching for Plan Qualification Requirements under the 2011 PR CodeJune 20, 2012
- Act 139: Municipalities Granted the Authority to Exempt Certain Businesses from Municipal Construction Excise Taxes.June 6, 2012
- Rules to Request Retroactive Tax Exemption by Not-for-Profit Organizations PublishedMarch 26, 2012
- PR Treasury issues guidance regarding Title I ERISA PlansMarch 1, 2012
- Related entities must request identification number in order to file 2011 income taxMarch 1, 2012
- New Income Tax Withholding Tables Issued for 2012January 16, 2012
- Transitory Income Tax Withholding Tables Issued for Wages Paid after December 31, 2010
- IRS Extends and Expands Relief Provided for Transfer of Assets from U.S. Retirement Plans to Retirement Plans in Puerto RicoDecember 29, 2011
- Employee Social Security Tax Withholding Rate Reduction Temporarily Extended into 2012December 28, 2011
- PR Treasury clarifies IVU Loto program implementationDecember 27, 2011
- Puerto Rico Treasury to Issue Guidance Providing a 2013 Deadline for Puerto Rico Qualification of Retirement PlansDecember 13, 2011
- 2011 PR Code Qualified Retirement Plan Provisions are finally AmendedDecember 12, 2011
- Puerto Rico Enacts Tax AmnestyNovember 28, 2011
- Withholding Agents Required to Report ElectronicallyOctober 3, 2011
- The Puerto Rico Investment Promotion Act of 2011September 23, 2011
- Puerto Rico Treasury Department Notifies Changes to Filing Forms to Conform to IVU Loto ProgramSeptember 14, 2011
- Enactment of 2011 PR Code Technical Amendments Bill Could Bring Additional Changes to Retirement Plans in Puerto RicoAugust 17, 2011
- Puerto Rico Treasury Department Issues New Income Tax Withholding Tables on Wages and Withholding Exemption Certificates under 2011 PR CodeAugust 16, 2011
- August 15, 2011
- April 28, 2011
- April 27, 2011
- April 26, 2011
- Economic Incentives for the Development of the Puerto Rico Film IndustryApril 1, 2011
- March 31, 2011
- March 14, 2011
- March 3, 2011
- March 3, 2011
- February 9, 2011
- February 7, 2011
- Technical Amendments to the Puerto Rico Internal Revenue Code of 1994 dealing with the Source of Income Rule and Excise Tax Act No. 154February 4, 2011
- One Year Extension of the Grant Program for Renewable Energy ProjectsFebruary 3, 2011
- February 1, 2011
- January 13, 2011
- December 30, 2010
- December 28, 2010
- December 22, 2010
- Puerto Rico 2010 Tax Reform - New Banking Reporting Requirements - Informative Return on Certain Financial Credit TransactionsDecember 21, 2010
- Phase One of the Puerto Rico 2010 Tax Reform and Establishment of Voluntary Declaration Program are Signed into Law / Phase Two of the Puerto Rico 2010 Tax Reform Already Before the Puerto Rico LegislatureDecember 1, 2010
- December 1, 2010
- Phase One of Puerto Rico 2010 Tax Reform and Voluntary Declaration ProgramNovember 14, 2010
- November 10, 2010
- October 25, 2010
- New Law Will Expedite Procedures for the Renewal of Internal Revenue Licenses and Eliminates Jewelry LicensesSeptember 9, 2010
- September 3, 2010
- July 22, 2010
- July 15, 2010
- June 7, 2010
- May 24, 2010
- May 17, 2010
- April 20, 2010
- March 23, 2010
- Puerto Rico Treasury Department Issues Guidance on Tax Treatment of Severance Payments Under Act No.80 After Puerto Rico Supreme Court Decision in OrsiniMarch 22, 2010
- March 14, 2010
- New Puerto Rico Supreme Court Decision Addresses Tax Consequences of Severance Payments Under Act No. 80February 5, 2010
- January 13, 2010
- The Puerto Rico Department of Treasury Issues Administrative Determination on Immediate Tax Benefit to Taxpayers Filing Individual Income Tax ReturnsNovember 1, 2009
- September 28, 2009
- September 28, 2009
- September 28, 2009
- Amendments to Act no. 7 of March 9, 2009, Known as the "Omnibus Plan for Economic Reconstruction Act"July 15, 2009
- June 1, 2009
- April 14, 2009
- February 20, 2009
- Regulation on the Filing of Reports under the Economic Incentives for the Development of Puerto Rico ActJanuary 11, 2009
- May 29, 2008