Puerto Rico Now Taxes Business to Business Services and Designated Professional Services

Wednesday, September 30th, 2015

 
 
Puerto Rico Department of Revenue
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Effective October 1, 2015, Puerto Rico taxes services sold to businesses and designated professional services. The tax rate for these services is 4%

Business to business services include all services provided by registered merchants to other registered merchants. There are some exemptions and exclusions. Services that are excluded from the definition of business to business services include bank charges; collection services; security services; cleaning, laundry, and waste disposal services; uncapitalizable repair and maintenance services; telecommunications services; and motor vehicle operating leases. These services remain taxable at the full rate of tax even when provided business to business. The current full tax rate is 11.5% (including the 1% municipal tax).

Designated professional services are also taxable at the 4% rate, even if the services are provided to a non-business customer. Designated professional services include:

(1) legal services and
(2) services provided by the following licensed professionals:
(a) agronomists;
(b) architects and landscape architects;
(c) CPAs;
(d) real estate companies, sellers, and brokers;
(e) professional draftspersons;
(f) professional real estate appraisers;
(g) geologists;
(h) professional engineers and surveyors; and
(i) return specialists who prepare tax returns, statements, and refund claims.

Note that Puerto Rico does exempt certain services from both the full rate and lower 4% rate.

http://www.hacienda.gobierno.pr/publicaciones/determinacion-administrativa-num-15-17


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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