The Puerto Rican government has reached tentative agreement on increasing the existing sales and use tax from 7% to 11.5%, as well as introducing a 4% sales tax on B2B services. The agreement follows the House of Representatives rejection in late April of the government's planned implementation of a new value added tax (VAT) regime to replace sales tax.
Formal approval of the legislation for the change is expected in the next few days and the change will be implemented approximately one month following its approval. The increase is meant to be a temporary solution for Puerto Rico's debt problems while work continues on the implementation of a VAT regime.
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