Tax & Accounting Blog

Puerto Rico: It’s Deja Vu All Over Again

Blog, Indirect Tax, ONESOURCE May 3, 2016

Puerto Rico’s legislators now contend the VAT system they approved less than a year ago,  including a rate increase for the B2B services, is bad for the Puerto Rican people.

Last night, the House of Representatives passed a substitute bill that amends the Puerto Rico Internal Revenue Code, all over again, to eliminate VAT and repeal the B2B rate increase from a 4% to a 10.5% that would come into effect June 1, 2016.

This back pedaling comes after just one meeting with gubernatorial candidate and ex-secretary of State David Bernier. The legislators now contend that eliminating the VAT would bring “stability and certainty to the citizens, the commercial and industrial sectors and the tax system itself.”  The Senate is expected to approve the bill on Thursday. Meanwhile, Governor Alejandro García Padilla has announced that he plans to veto the bill as soon as it reaches his desk.

It’s an election year and Deja Vú all over again.

 

Posted on behalf of Isabel Garces