Puerto Rico: Transitional rules for VAT, implementation on June 1st

Puerto Rico: Transitional rules for VAT

The Puerto Rico Treasury Department issued guidance providing new transitional rules for implementation of the value added tax (VAT) regime. Implementation of the VAT regime—which replaces the Puerto Rico sales and use tax—had been postponed earlier this year from April 1, 2016, to June 1, 2016.

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The transitional rules are contained in Administrative Determination (AD) 16-07 (April 18, 2016), and provide:

  • A new electronic system (known by the Spanish acronym “SURI”) to progressively replace current electronic systems used by the tax authorities and to be used for filing monthly VAT returns and remitting payments of VAT, among other reporting.
  • A new system concerning the replacement of merchant registration certificates under the current sales and use tax regime because they will all expire on July 20, 2016.
  • Requirements for the monthly filing of a VAT return, with the return due by the 20th day of the month after the month in which the VAT was collected (so that the first VAT return will be due July 20, 2016).
  • New VAT invoicing requirements and rules concerning the fiscal voucher to be used by merchants.
  • All existing eligible reseller certificates expire on June 30, 2016, regardless of the expiration date listed on the certificate.
  • Designated professional services providers that opted for the cash accounting method prior to June 1, 2016, will remain subject to the cash accounting method for VAT purposes.
  • Rules applicable for “small merchants” or those with gross sales of less than $125,000.

 

Read an April 2016 report [PDF 61 KB] prepared by KPMG LLP: Puerto Rico releases new transitional rules for the introduction of VAT on June 1, 2016

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