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Puerto Rico relaunches VAT at 11.5% for 2016

  • VAT
  • 16 May 2015 | Richard Asquith

Puerto Rico relaunches VAT at 11.5% for 2016

The government of Puerto Rico has reached a new compromise in an attempt to reverse the decision to abandon the implementation of VAT.

The introduction of VAT is seen as a key reform as the country struggles to bring its deficit and debt levels under control.

The new plan will include an increase in the existing sales and use tax from 7% to 11.5%. There will also be a 4% tax on B2B transactions. The replacement Value Added Tax regime will be introduced at the start of 2016. This new rate will only raise $1.2 billion in revenues compared to the originally planned rate of 16% which would have raised $1.5 billion.

It is hoped that the new planned will be passed by the parliament before the end of May.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.