May 09, 2016
From KPMG TaxWatch
Legislation (“substitute bill” 2032, 2838, 2839, 2840") that would repeal the value added tax (VAT) regime adopted in 2015 has been approved by both houses of Puerto Rico’s legislature. The VAT is currently scheduled to become effective June 1, 2016. On May 2, 2016, Puerto Rico’s House of Representatives voted in favor of the legislation and the Senate likewise approved the bill on May 5, 2016. It should be noted that all lawmakers present and voting were in favor of the VAT repeal.
The governor of Puerto Rico will have 10 days to sign or veto the bill, or it will become law. If the bill is vetoed, the legislature can resubmit the bill for a vote. If 2/3 of the members of each chamber approve the bill, it will become law. The governor has publicly stated his opposition to the bill and said that he intends to veto the legislation.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.