Tax Update - Sales Tax on Services Rendered by Non-residents

Services Rendered by a Non-Resident Person to a Person in Puerto Rico

Act 72 of 2015 amended the PR Internal Revenue Code (the "Code") to establish that in the case of services rendered by a non-resident person to a person located in Puerto Rico, the person responsible for remitting the applicable sales and use tax on such services to Treasury is the person who receives the service in Puerto Rico. This provision comes in effect on October 1, 2015.

The applicable SUT rate will depend on the type of service received - taxable services subject to the 10.5% Commonwealth SUT or designated professionals services or services rendered to other merchants subject to the 4% Special SUT.

Municipal SUT rate will not apply since the service is rendered outside of Puerto Rico.

The corresponding SUT will apply to services provided by non-resident persons that are received by persons located in Puerto Rico, only in connection, either directly or indirectly, with operations or activities carried out in Puerto Rico. 

Disclaimer

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.


IRS CIRCULAR 230 DISCLOSURE:

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.