New pr reform tax

New Puerto Rican tax reform

First of all the last January 31 of current year the Puerto Rican Congress approve a new tax reform. This means that some news laws apply at the hour of paying taxes by taxpayers. Are the taxpayers fully informed about those laws, do they really know all about this? How have they been affected by these laws? We believe the Puerto Rican taxpayers are not fullyinformed and have a lot of doubts about what the new tax reform really represent for them.
Just for writing definition the tax reform is referred to the law making changes to the tax provisions, including filing requirements, income reporting, allowable deductions, tax credits, and tax rates. The amendments presented in the law are new. The term law refers to the regulations established by thelegislation. Tax rate means the percentage of income, wealth, etc, assessed as payable in taxation. Income tax return refers to a document giving the tax collector information about the taxpayer's tax liability. Internal Revenue Service is the division of the U.S. Department of the Treasury that collects internal revenue, including income taxes and excise taxes, and that enforces revenue laws. GrossProfit means gross receipts minus the cost of goods or production but before the deduction of such other costs as rent or salaries. While Net Profit is the actual profit made on a business transaction, sale, etc., or during a specific period of business activity, after deducting all costs from gross receipts. Fiscal Year refers to any yearly period without regard to the calendar year, at the end ofwhich a firm, government, etc., determines its financial condition. (Dictionary.com, 2011)
We found an essay in El Nuevo Día, (2011); this essay presents the two sides of the new tax reform. The writer began telling that this new law looks like the first politic decision from Luis G. Fortuño’s administration. Also, she said about this act that while the government argues that the Internal RevenueCode of 2011 will serve to make a turn toward recovery, figures in the socioeconomic and political area are convinced that the balance of the reform is nothing more than a risky experiment in which their funding, the tax relief and financial performance to be seen. This reform reflects the effect in 2016 only if the law be fulfilled as it. The government thinks this is going to change the mind ofthe people that do not present their income. The author said something that no one ever said that this reform is a continuous part of another and follows some techniques from 2006.
Why did the government create this reform? This law was created for the purpose of providing tax relief of $ 1.2 billion annually to individuals and corporations to stimulate the economy and job creation, fortransitional provisions for repeal of Act No. 120 of 31 October 1994, as amended, known as the Revenue Code Puerto Rico Internal 1994, for other purposes. This law be firmed in January 31, 2011 and be named Ley No.1 de 31 de enero de 2011. And has stay in process from 2008. Before this one another law be firmed, during the 90’s until when in 2000 the government change. In 2000 the most important reform wassupposed to began and the new governments decide to no approve there. In the law we can found that they decide create and approve this to give an update adapted to the economical status at the present and to “help” the taxpayer. (Ley 1 de 31 de enero de 2011, Puerto Rican Congress)
For tax year 2011 we will see the following rates for taxable income:
The first $ 5,000 of net income will be freefrom contribution;
7% - those who earn between $ 5.001 and $ 22.000;
14% - those earning between $ 22.001 and $ 40.000;
25% - those earning between $ 40.001 and $ 60.000, and
33% - those who earn more than $ 60,000.
However, those earning up to $ 20.000 will not have to pay contributions, the increase in operation personal exemption, deduction and credit for employees for work, as seen...