Gov’t collects $26.4M from SUT on B2B in 4 months
Since going into effect last October, the Sales & Use Tax (SUT) on business-to-business (B2B) services has generated $26.4 million, the Puerto Rico Treasury Department reported.
The tax, collected by the company or professional providing the service, is currently set at 4 percent. It will increase to 10.5 percent in April when the island reverts from a SUT to a Value Added Tax (VAT) regime.
“From the 4 percent, we collected $6.2 million in November, $8.8 million in December, and $11.4 million in January,” the Treasury Department said through spokesperson Iris Riefkohl.
These amounts correspond to taxes paid for professional and B2B services provided in October, November, and December, respectively, Riefkohl said.
The SUT, which applies to most sales in Puerto Rico, is currently 11.5 percent. This rate will remain unchanged with the changeover to VAT. B2B services don’t pay the 1 percent municipal tax, which is why they will be taxed at 10.5 percent.
The Treasury Department recently announced that companies with annual sales of products and services under $125,000 would be exempted from having to collect the VAT and from having to submit monthly tax statements as currently required of all companies with yearly sales over $50,000.
However, the department cautioned that this exemption is “neither obligatory nor automatic.”
“The company that qualifies must obtain a Small Merchant Certificate from the (Treasury) Department,” the agency told News Is My Business in response to written questions.
As for total collections of SUT/VAT and B2B taxes, the Treasury Department anticipates doubling its take in the current fiscal year.
In FY 2015, the SUT brought in $1.4 billion in tax collections. For FY 2016, the amount is estimated to reach $2.3 billion.