Tax & Accounting Blog

Puerto Rico VAT: Good News is No News?

Blog, Indirect Tax, ONESOURCE, Sales and Use Tax January 6, 2016

While we have known about Puerto Rico’s transition to VAT since June, the absence of any official guidance from the Puerto Rico Department Of Revenue has been concerning. In the Act, Ley 72-2015, the Secretary of the Treasury of Puerto Rico has the express authority to extend VAT’s official inception from April 1, 2016 for a period of 60 days. Following the enactment of Ley 72-2015, there was a long period of silence, leading many, including the author of this post, to fear an extension to VAT was forthcoming. Indeed as of 29 December, 2015 the Department of Revenue had yet to provide any official guidance in the form of regulations, forms, newsletters, circular letters, administrative determinations, clues, hints, or guesses. While the final three are not technically guidance, the Department of Revenue has officially broken its silence on VAT with Administrative Determination No. 15-26 (29 December, 2015) (In Spanish). This notice reminds taxpayers of the imminent transition to VAT and confirms the effective date of April 1, 2015, providing us no update in the form of an update. However, more reassuringly it promises regulations, circular letters, administrative determinations, and newsletters establishing guidelines for transition to VAT. Among the highly anticipated regulations are further detail of the tax base and guidance for remitting VAT.


We will continue to update you regarding the VAT transition as the Department of Revenue releases these highly anticipated documents.