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Puerto Rico Treasury: Businesses must remit sales tax every 2 weeks

By on August 7, 2017

SAN JUAN – Puerto Rico Treasury Secretary Raúl Maldonado said Monday that, in light of the approval of Act 46 of 2017, the sales and use tax (IVU by its Spanish acronym) withheld by businesses must be remitted every two weeks.

“On July 31, 2017, the Department issued Administrative Determination 17-07 with the purpose of establishing the requirements to comply with the obligation to pay the IVU in biweekly installments and establish the date on which this obligation will begin to apply. The requirement for payment in biweekly installments is applicable when the person is a Large Taxpayer (as defined in Section 1010.01 (a) (35) of the 2011 Internal Revenue Code, as amended “Code”), and to any merchant whose monthly sales tax volume deposited during the previous calendar year exceeds $2,” Maldonado said in a written statement.

A Puerto Rico Treasury Department payment receipt.

“The deadlines to remit the biweekly installments…are the 15th of each month and the last day of the month. Although the law establishes that this obligation is in effect for the month of July, the Department determined that due to the short time elapsed between the approval of the law and the effective date of the law, and with the objective of allowing businesses additional time to be able to make the necessary changes…the obligation to remit the biweekly installments will be effective as of August 2017 for Large Taxpayers and from September 2017 to the other business owners to whom it applies.

“Therefore, the Large Taxpayers must pay the first biweekly installment no later than Tuesday, August 15, 2017 and other business owners must pay the first biweekly installment no later than Friday, September 15, 2017,” the Treasury secretary explained.

As for the municipal IVU, the official said biweekly payment terms are not applicable.

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“For the moment, it has been determined that the biweekly deposit requirement will only apply to the IVU that is deposited in the Department, so it will not be required for the deposits that merchants have to make directly to the municipalities. Therefore, the expiration date for the payment of the IVU to the municipalities continues to be along with the filing of the monthly IVU return of the municipality no later than the 20th day of the month following the month in which the transaction occurred…,” he explained.

“Merchants under the Taxpayer Rehabilitation Program, who currently deposit the IVU in weekly installments, must continue to make payments under the IVU pursuant to said agreement,” he said.

He indicated that any person that must remit the IVU biweekly, does not comply, will be subject to the imposition of a 10 percent penalty on the amount that should have been deposited in biweekly installments.

This 10 percent penalty is additional to any other penalty imposed by Treasury, he added.

Installments may only be remitted online, via the internal revenue page, SURI.

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