Puerto Rico: Commission recommends pursuing VAT system

Puerto Rico: Commission recommends pursuing VAT system

A tax commission established under tax reform law in Puerto Rico published its report in August 2015, addressing whether to move forward and implement a value added tax (VAT) system.


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According to the commission’s report, it was advised that Puerto Rico not return to its prior excise tax system. Rather the commission concluded that a VAT system is a more efficient alternative for taxing consumption. Consequently, Puerto Rico is expected to pursue measures toward implementation of a VAT regime, unless the legislature repeals the indirect tax reform.

Entities doing business in Puerto Rico are also reminded that significant sales and use tax changes are effective October 1, 2015.  


Read an August 2015 report prepared by tax professionals with KPMG in Puerto Rico.

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