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Puerto Rico May Repeal VAT


 Puerto Rico: will it or won't it switch to VAT on June 1?

Puerto Rico does not yet have a value added tax. The territory was initially scheduled to transition to VAT on April 1, but that date was delayed in order to give the Tax Department and businesses more time to prepare for the change. VAT is currently scheduled to take effect on June 1, 2016. Now, however, there is a move to repeal the VAT.

On May 3, the Puerto Rico House of Representatives passed a measure to repeal the VAT. On May 5, the Senate unanimously voted in favor of the repeal. House and Senate leaders say they are acting correctly and that the VAT would hurt small and mid sized companies, as well as the already stressed economy.

Governor Alejandro Garcia Padilla supports transitioning to VAT and has vowed to fight its repeal. He says he will veto the legislation.

Amid all this uncertainty, the Puerto Rico Department of Revenue is providing guidance for the transition to VAT.

Facilitate value added tax compliance with Avalara AvaTax for VAT.

photo credit: SDC14267 via photopin (license)


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.