Saturday, April 30, 2016

VAT Update

The Puerto Rico Secretary of Treasury has issued Administrative Determination 16-07 providing procedures for a transition from Sales Tax to Value Added Tax effective June 1, 2016. A very brief summary follows:

  • The VAT rate is 10.5%;
  • A "Certificate of Small Business" will be available for businesses with gross income volume of less than $125,000;
  • The "Reseller Certificates" remain valid for the 1% Municipal Sales Tax exemption;
  • The "Certificate for Exempt Purchases and Services Subject to the 4% Special-SUT" (Form 2916) remains temporarily in effect until further notice and will serve as a certificate of exempt purchases for VAT purposes.
  • Eligible Reseller Certificates" expire June 30, 2016 regardless of their expiration date.  After June 30, 2016 these merchants will be fully subject to VAT.
  •  A new web based portal (SURI) would be available for all tax filings and the first filing is July 20th, 2016;
  • The filing of returns for merchants with pre-existing contracts will continue under PICO until June 30, 2016.  The SUT paid on the pre-existing contract will not be creditable against the VAT;



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.


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