Several members of Puerto Rico's Legislative Assembly are currently considering the introduction of legislation to block the upcoming change from sales and use tax (SUT) to value added tax (VAT). The move reportedly has bipartisan support, including support from the presidents of both the House of Representatives and the Senate.
The change from SUT to VAT was approved in May 2015 following stiff opposition from both houses of the Legislative Assembly. The change included a transition that involved increasing Central SUT rate from 6% to 10.5% from 1 July 2015, and introducing a 4% SUT on business-to-business and professional services from 1 October 2015. The final switch from SUT to VAT at the rate of 10.5% plus 1% municipal SUT was to be effective 1 April 2016, but was delayed to 1 June 2016 (the latest the change can occur under law).
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