Section 1061.15 of the Puerto Rico Internal Revenue Code requires a taxpayer to submit an audit of the financial statements if the gross business volume during the period covered by the return exceeds $10,000,000.

Per recent legislation amendments, taxpayers with a gross business volume equal to or greater than $3,000,000, but less than $10,000,000, may instead submit a Compliance Attestation or Agreed Upon Procedure (AUP), prepared by a CPA licensed in Puerto Rico in accordance with Circular Letter 20-39, and file together with their Puerto Rico income tax return.

Taxpayers with a volume of business equal to or greater than $1,000,000, but less than $3,000,000, have the option to submit an audit or an AUP in accordance with Circular Letter 19-14 and file together with their Puerto Rico income tax return to receive a total or partial waiver on withholdings for services rendered.

Before 2019, members of a group of related entities that report a volume of business below $1,000,000 during the tax year who opt to submit an AUP were required to file in accordance with Circular Letter 20-39. After 2019, members of a group of related entities with gross revenue below $3,000,000 may choose to submit an audit of its financial statements or an AUP in accordance with Circular Letter 19-14.

A Puerto Rico income tax return is considered not filed unless the AUP report or audited financial statements are included with filing. When an audit is required, a copy of the audited financial statements, or a portion thereof, is also included with the Puerto Rico Business Volume and Personal Property annual tax filings.