Treasury Secretary Teresita Fuentes confirmed that the agency’s Administrative Determination No. 17-19 regarding the non-applicability of the Sales and Use Tax (SUT) to certain donations continues in force.
It was determined that certain donations of tangible personal property and services made by foreign donors to hospitals, nonprofit entities, public instrumentalities and municipalities of the government of Puerto Rico and the United States, including its Legislative Branches and its Judicial Branches or individuals, will not be subject to the payment of the SUT because, by their nature, they do not contain a purchase or sale price, she said.
However, the official clarified that the tangible personal property that a merchant introduces for the purpose of being donated and that is not considered part of the merchant’s inventory, will not be subject SUT to the extent that the merchant can prove that they do not constitute inventory for resale and that they were introduced to Puerto Rico with the purpose of being donated.
However, as established in the determination, Treasury reserves the right to evaluate the nature and amounts of the property received, as well as the person who imports it. This to make sure there is no commercial purpose on the transaction.