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Insight to value added tax

On February 11, 2015, the Governor of Puerto Rico filed Bill No. 2329, better known as the Transformation of the Tax System of the Commonwealth of Puerto Rico Act. This Bill proposes various changes to the income tax system, the creation of a new Conduit Entity, and also introduces a value added tax (VAT), which would substitute the current sales and use tax. If approved, there will be a transition period until December 31, 2015 and full effectiveness as of January 1, 2016.

Our series of tax articles (which can be accessed here) explain the new tax system and terms introduced. Please contact our Tax Department should you require additional information regarding this or any other tax issue. We will be glad to assist you.


  • 02.26.16 Tax Update: Summarized guidelines and provisions for transition into VAT
  • On February 26, 2016, the Puerto Rico Treasury Department (PRTD) issued Administrative Determination 16-01: “Transition to the Value Added Tax (IVA). Both PICO and SURI (see our February Tax Alert on SURI) will be available to process transactions, filings and requests. The following table summarizes the guidelines and provisions as to what transactions will be processed in which system.
  • 12.30.15 AD 15-26 Effectiveness of Value Added Tax
  • On December 29, 2015 the Puerto Rico Treasury Department ("PRTD") released Administrative Determination 15-26 (“AD 15-26”) to provide the first guidance for the Value Added Tax (“VAT”) implementation process in Puerto Rico.
concept of the fiscal statement 
        that will be in effect if Bill 2329 is approved as is.
        • 03.12.15 Tax Update Status of proposed tax reform Bill No. 2329
        • During the past month, and notwithstanding the publicity campaign launched by the Government, the major issue in the minds of all businesses and residents of Puerto Rico is the uncertainty that the proposed change from the current Sales and Use Tax System (“IVU”) to a 
Value Added Tax System (“VAT”) 
        has created.
waivers and certificates 
      that will apply if the Bill is approved as is.
exclusions and exemptions 
        that will apply if the Bill is approved as is.
transaction rules 
        that will apply if the Bill is approved as is.