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Schedule V Incentives

INCOME TAX FOR EXEMPT BUSINESSES UNDER

200__

ACT 135 OF 1997

Rev. 12.06

To be filed with Form 480.30(II)

Taxable year begining on __________, ____ and ending on __________, ____

Taxpayer's Name

Employer Identification Number

Type of Decree:

New

Renegotiated

Case Number

Type of Business

Converted

Extended

Effective period for income:

Number of jobs directly related with the manufacture or designated service:

Current:__________ Required:__________

Begins:______________ Ends:______________

Questionnaire (Applies only to renegotiated cases)

Part I

Yes

Were you under the optional tax in any of the years included in the computation of the basis period average income? (See instructions) .....................

(1)

_________

_________ ________

Option 3A; Years

Others; Years

Rate

Was the 2( j ) income subject to tax during all the years included in the computation of the basis period average income? (See instructions) ................................

(2)

Option 3A (Enter the amount from Part II, line 4(b) of this schedule on Schedule O Incentives, Part II, line 2)

Rate

Others (Specify) ________________________________

Was the 2( j ) income subject to tax during any of the years included in the computation of the basis period average income? (See instructions) ............................

(3)

_________

_________ _________

Option 3A; Years

Others; Years

Rate

Computation of the Basis Period Average Income (Applies only to renegotiated cases)

Part II

Industrial development income from the last 5 years before the renegotiation (Part I, lines 2 and 7 of Schedules M Incentives and

N Incentives, or Part II, lines 1 and 2 of Schedule O Incentives)

Year

_____

(a) IDI

(b) 2 (j)

)

(b) 2 (j)

(a) IDI

................................................................................

Average income of the 3 years with the highest income

(2)

........................................................

Industrial development income from the year preceding the renegotiation

(3)

Basis period income (The larger of line 2 or 3. See instructions)

...................................................................

(4)

Part

IIII

Net Income Subject to Tax

..................................................................................................................

Net operating income (or loss) for the year (Part VI, line 39)

(1)

...........................................................................................................................................

Less: Investment income (See instructions)

(2)

Total industrial development income (or loss) (Subtract line 2 from line 1. If an operating loss, do not continue. Enter zero (-0-) here and on line 5)

(3)

Net operating loss from preceding year (See instructions)..........................................................................................................................

(4)

Net industrial development income subject to special deductions

(Subtract line 4 from line 3.If it is equal or smaller than 0, do not continue) ...................

(5)

Special deductions for exempt businesses (See instructions Schedule V1 Incentives):

(6a)

Payroll deduction ..............................................................................................................................

(6b)

Human resources training and improvement expense deduction ..............................................................

(6c)

.............................................................

Research and development expense deduction.........................

(6d)

...................................................

Investment on buildings, structures, machinery and equipment deduction

(6e)

Total deductions (Add lines 6(a) through 6(d))

.................................................................................................................................

(7)

Net industrial development income after special deductions (Subtract line 6(e) from line 5) .............................................................................

(8)

Deduction for purchases of products manufactured in Puerto Rico (See instructions) .....................................................................................

(9)

Net industrial development income after deduction for purchases of products manufactured in Puerto Rico (Subtract line 8 from line 7) .................

....................................................................................................

(10)

10.

Less: Basis period income (Part II, line 4, Column (a). See instructions)

(11)

11.

.....................................................................

Net industrial development income subject to tax (Subtract line 10 from line 9. See instructions)

Part IV

Tax Computation

Fixed tax rate on IDI: (1a)

(1b)

(1c)

other

Total tax (Multiply line 11 by line 1) .........................................................................................................................................................

(2)

Recapture of credit claimed in excess (Schedule B Incentives Part I, line 3) ...............................................................................................

(3)

Less credits:

Special credits granted (Art. 41A-6) (Do not exceed 50% of line 2) ..........................................................

(4a)

Credit for products manufactured in Puerto Rico (See instructions) ............................................................

(4b)

Credit for losses of United States parent company (See instructions) ........................................................

(4c)

Credit for royalties .............................................................................................................................

(4d)

Credit for the establishment of an eligible conservation easement or donation of eligible land (See instructions) ..

(4e)

Credit for construction investment in urban centers (See instructions) ........................................................

(4f)

Credit for merchants affected by urban centers revitalization (See instructions) ...........................................

(4g)

Other applicable credits ......................................................................................................................

(4h)

Total credits (Add lines 4(a) through 4(h)) ........................................................................................................................................

(4i)

Total tax liability (Subtract line 4(i) from the sum of lines 2 and 3. Enter the difference here and on Form 480.30(II), Part I, line 1(c)) .....................................

(5)

Enter here: 95% of line 5 ................... (6a)

and 5% of line 5 .......................................................................

(6b)

Retention

Period: Ten (10) years