Puerto Rico Considers Tax Reform

The Governor of Puerto Rico recently announced a proposal that would overhaul multiple components of the island’s tax system, including sales tax. Specifically, the Governor suggests….

  • Prepared foods be taxed at a special rate of 7% as opposed to the standard rate of 11.5%.
  • A reduction of the special rate applicable to Business to Business services 4% to 3% in 2019 and its total elimination in 2020.

The Puerto Rico legislature is also considering an exemption of feminine hygiene products as well as possible new sales tax holiday to support hurricane preparedness from May 25 until June 1. Eligible items would include items such as flashlights, batteries, bolts, nails, candles, propane, portable stoves, first aid kits, and canned food.

More information can be found here

Author

Ramon Frias

Ramon is a Tax Counsel on the Regulatory Analysis team at Sovos. He is licensed to practice law in the Dominican Republic and is a member of the Dominican Bar Association. He has a Certificate Degree from Harvard University as well as a J.D. from the Universidad Autonoma de Santo Domingo. Ramon has written a number of essays about tax administration and has won the first prize in the international essays contest sponsored by the Inter American Center of Tax Administrations (CIAT). Prior to joining Sovos, Ramon worked for more than 10 years in the Department of Revenue of the Dominican Republic where he served as Deputy Director. He is proficient in French and Spanish.
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