Puerto Rico: Bill to repeal VAT moves forward | KPMG | US

Puerto Rico: Bill to repeal VAT moves forward in legislature

Puerto Rico: Bill to repeal VAT moves forward

Puerto Rico’s House of Representatives on May 2, 2016, voted to repeal the value added tax (VAT) regime enacted in 2015 by Act 72-2015, and scheduled to be effective June 1, 2016.


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The legislation (“substitute bill” 2032, 2838, 2839, 2840) to repeal the VAT was passed by the lower house, and now is schedule to be considered by the Senate on Thursday, May 5, 2016. 

According to reports in the press, the governor has stated his opposition to the bill and said that he intends to veto the legislation. In Puerto Rico, a vote to override a veto requires a two-thirds majority in each house.


Legislation enacted in 2015 (Act 72-2015) included measures to replace Puerto Rico’s sales and use tax system with a VAT regime. Originally, the VAT regime was scheduled to be effective April 1, 2016. However, implementation of the VAT regime was postponed earlier this year from April 1, 2016, to June 1, 2016. Read TaxNewsFlash-United States

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