Treasury ‘ready’ to handle sales tax rate increase

Written by  //  June 24, 2015  //  Government  //  No comments

Puerto Rico Treasury Secretary Juan Zaragoza (Credit: © Mauricio Pascual)

Puerto Rico Treasury Secretary Juan Zaragoza (Credit: © Mauricio Pascual)

The Puerto Rico Treasury Department is prepared to handle the change rate of the Sales and Use Tax to 11.5 percent, from the current 7 percent, when it goes into effect July 1, agency Secretary Juan Zaragoza said Tuesday.

“At Treasury, we’re ready to work the applicability of the changes established by Act 72 that amended several sections of the Puerto Rico Internal Revenue Code of 2011. Monthly SUT filing and programming aspects in the Integrated Merchant Portal (known as PICO) have been reviewed,” he said.

“I must emphasize that we will continue strengthening oversight efforts so that the level of SUT uptake continue to increase,” he said.

In May, the Gov. García-Padilla administration approved an increase of the central government’s portion of the SUT to 10.5 percent, from 6 percent, while the municipal portion remained at 1 percent, pushing the sales tax to 11.5 percent. A 10.5 percent SUT rate applies to imports of taxable items.

“As for the taxable items subject to the new 11.5 percent rate for both individuals and among merchants, we should clarify that these are still the same as at present, both for goods and services. That is to say, that all products and services that currently do not pay SUT will continue to be exempt under the new rate,” he added.

Services among merchants currently taxable and that starting July 1 will begin to be taxed at 11.5 percent include: bank charges; account collection services; ordinary lease of motor vehicles; telecommunications services; laundry services; repair services; maintenance services; security services; waste collection; and cleaning services.

Effective October 1, other business-to-business services and professional services will be subject to a designated intermediate introductory SUT rate of 4 percent.

“All businesses should review their systems to make the necessary adjustments or programming. Therefore, they should contact their service providers to become informed of the steps to make adjustments in their sales points (cash registers) or any other accounting system used for billing and those related to IVU Loto,” he said.

The agency will host a webcast at 10:30 a.m. today to offer more information about the upcoming change. To participate, merchants must register here.

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