The following summarizes the major provisions of the “Ley Ponte al Día en el CRIM: Plan de Incentivo para el Pago de Contribuciones Adeudadas”, Act 145 of December 9, 2013 (the “Act”). This Act establishes an incentive plan or amnesty that provides for the abatement of interest, surcharges and penalties on personal and real property tax debts with the Municipal Revenue Collection Center (the “CRIM”, in Spanish acronym).
All taxpayers, or their authorized agents, that have personal and/or real property tax debts, with certain exceptions, can take advantage of the incentive plan established by this Act. Taxpayers that choose to make the payment of their personal and/or real property tax debts under the incentive plan will have accrued interest, surcharges and penalties on such debts waived.
Taxpayers that are currently under a fiscal audit, administrative hearing or judicial review, may take advantage of the incentive plan. Moreover, taxpayers that are currently under a payment plan may renegotiate the pending balance due under the incentive plan established by this Act.
Taxpayers that have not filed the Personal Property Tax Returns for the tax year 2012 and/or previous years may file such returns with the benefit that no interest, surcharges and penalties will be charged but only if the total principal amount of the tax due is paid, without the benefit of a payment plan.
The principal of the debt may be paid in three forms: one single payment of the total debt (principal amount), in installments under a payment plan, or with the constitution of a mortgage that guarantees the payment. Depending on the terms of the incentive plan, interest will accumulate on the principal amount owed.
The term of the incentive plan may not be for a period greater than 4 years. The following table summarizes the payment terms under the different alternatives:
|Payment Alternatives||Terms of Payment||Annual Interest Rate|
|Entirely with one (1) single payment||No interest, surcharges and/or penalties will be charged||0%|
|Within a term of one (1) year||Initial payment of 10% of the principal due, remaining balance subject to a payment plan not exceeding 12 months||0%|
|Within a term of two (2) years||Initial payment of 10% of the principal due, remaining balance subject to a payment plan not exceeding 24 months||5%|
|Within a term of three (3) years||Initial payment of 10% of the principal due, remaining balance subject to a payment plan not exceeding 36 months||7%|
|Within a term of four (4) years||Initial payment of 10% of the principal due, remaining balance subject to a payment plan not exceeding 48 months||10%|
The incentive plan under this Act will be in effect for a period of 100 days upon the issuance of an administrative order by the CRIM and an orientation period of 30 days. On December 12, 2013, the CRIM issued the Administrative Order Num. 2013-06 with guidelines for the incentive plan under the Act. Pursuant to the Administrative Order the incentive plan will be effective from December 18, 2013 until March 27, 2014.
Finality of Payment
The payment and execution of the incentive plan under this Act is voluntary and final for all purposes and will not be subject to subsequent claims.
Elimination of Debts from CRIM Records
The Act provides that personal property tax debts outstanding for over 10 years from the date of filing of the personal property tax return shall be eliminated from CRIM records if no collection efforts have been made by CRIM.
Real property tax debts outstanding for more than 15 years from the date of notice shall be eliminated from CRIM records if no collection efforts have been made by CRIM.
Because of the general nature of this newsletter, nothing herein should be considered as legal advice or a legal opinion. For further information about the contents of this newsletter, or should you need further assistance in connection with these matters, please contact the firm’s Tax Practice Group.