Completely Compliance: Puerto Rico Update

by DMA Staff | Apr 07, 2016
Completely Compliance: Puerto Rico Update

Many changes are set to occur in the Territory for 2016 and some have already been postponed since our last newsletter. The conversion to VAT tax has been postponed until June 1, 2016 and there is discussion that it may be postponed again. Some proposals currently in the legislature look to remove the conversion to VAT altogether.  

The list below highlights some of the postponed VAT changes:

  1. Reseller permits will expire on May 31, 2016. The Puerto Rico municipalities will not be converting to VAT. As such, reseller permits will continue to be valid at the local level.
  2. The online filing PICO system will become limited in its functionality. This system will be replaced with SURI. All information transfers will be completed by the Treasury, and businesses should be notified once their conversion to the new system is complete.
  3. SUT business licenses will no longer be valid once the VAT system is in place. Businesses will need to login to the SURI system and request a new certificate for VAT.
  4. Certain services taxed at 4% will not increase to 10.5% (11.5% with municipal tax) until the VAT is enacted.
  5. Merchants may take credit for the VAT tax paid after June 1, 2016 but they must have the proper documentation in order to support the credit. Documentation should include tax paid on the monthly return for imports, fiscal voucher and/or monthly VAT return.
  6. The fiscal vouchers will be forms provided from seller to purchaser with specific information. Puerto Rico has not approved a specific form and will allow for the invoices to act as fiscal vouchers until the approved form is released.
  7. SUT credits should be used before the VAT tax is enacted, as it is uncertain whether these will be valid after the conversion.
  8. Due dates of VAT returns are not expected to change. Bonded taxpayers will still make a payment on the 10th of each month for goods imported the prior month, and VAT returns are continuing to be mandatory eFile by the 20th of the following month using the SURI system.

Please do not hesitate to contact your local DMA office should you have specific questions or requests.

Completely Compliance is a quarterly e-newsletter exclusively for clients and employees of DMA. It is intended to provide relevant sales/use tax news, events, and information. As such, this e-newsletter should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisors. Before making any decision or taking any action based upon information contained in this e-newsletter, you should consult with a DMA professional.