Wednesday, June 3, 2015

Tax Update - Sales and Use Tax (IVU) - Ley 72 de 29 de mayo de 2015

Last Friday, a new law was enacted. Below are the main points related to the Sales and Use Tax (IVU). Please do not hesitate to contact us with questions.

 - As of July 1st, 2015, transactions currently subject to the 7% IVU will be subject to a 11.5% Commonwealth (10.5%) and municipal (1%) IVU. This will be in effect until March 31, 2016.

 - Effective for periods commencing after June 30, 2015, merchants with a Re-seller Certificate may claim 100% credits for IVU paid on their inventory against IVU collected on their sales. The 75% limitation currently in place is eliminated.

 - Starting October 1st, 2015 and until March 31st, 2016:

      1. Business to business services that are currently taxable will be subject to an 11.5% IVU.
      2. Business to business services and designated professional services (e.g., certified accountants, lawyers, engineers) that were previously exempt from IVU will be subject to a Commonwealth IVU of 4%. No municipal IVU will apply to services subject to the 4%.

- In the case of services rendered by a non-resident, the recipient in Puerto Rico of the service will be the party responsible for remitting the IVU to the Treasury Department.

- Transactions occurring after March 31, 2016, will be subject to a new VAT (IVA) of 10.5% plus a 1% municipal IVU.


The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.


To comply with requirements imposed by the Department of the Treasury, Isla CPA informs you that any U.S. tax advice contained in this post (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any  taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein.