Indirect tax ebook - Puerto Rico

Every merchant that sells a taxable item, which is not expressly excluded, must file a monthly SUT return to be filed before the PRTD on or before the tenth (10th) day of the next calendar month following such sales.

In addition, every merchant that has annual sales of two hundred thousand dollars ($200,000) or more will have to file the monthly return electronically.

Remittance

The SUT is payable to the Secretary by the person responsible for issuing the payment, no later than the tenth (10th) day of the calendar month following the month during which the transaction subject to the tax occurred. In the case of persons who do not have a Merchants' Registry number and have purchased taxable items subject to the use tax, they shall remit the SUT together with the monthly return (Form 2915).

Bad Debt Relief

If the customer fails to pay for the taxable items purchased, the merchant can claim a credit on the monthly return in which the account receivable becomes uncollectible. It is important to mention, that in order to claim this credit the merchant should use the direct write-off method to account for the uncollectible accounts receivable. Finally, in case the uncollectible account receivable is recovered, the merchant should include the total recovery as a taxable sale on the monthly return in order to pay the corresponding SUT.

Penalties

Penalties are imposed based on late filing, falsely having or presenting a Certificate of Registry or a Certificate of Exemption and incorrectly withholding and remitting the SUT.

The penalties imposed are as follows:

• Every merchant that announces that he will pay or relief some other person from the tax will be subject to a penalty of not less than $1,000 but not more than $20,000 
• Every merchant that does not show separately on its invoices or receipts the amount of sale from the amount corresponding to the tax will be subject to a penalty of $100 per transaction 
• Every merchant that displays a false Certificate of Registry will be subject to a penalty of $5,000
• Every merchant that displays a false Certificate of Exemption to avoid taxes will be subject to a penalty of 200% of the tax
• Every merchant that does not duly register will be subject to a penalty of $10,000
• Every merchant that intentionally submits false information on the Certificate of Registry will be subject to a penalty of $5,000
• Every merchant that falsifies or possess a fraudulent Certificate of Registry will be subject to a penalty of $10,000
• Every merchant will be subject to a penalty of not less than 25% but not more than 50% for not remitting the tax on the date prescribed by law (the 10th day of the month after the transaction occurred)
• Every merchant that withholds the tax incorrectly will be subject to a penalty of $100
• Every merchant that does not withhold the tax as provided by law will be subject to a penalty of $20,000. 
  
  
   

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply