T a x  A l e r t
Sales and Use Tax

Collaborative Agreement between
Treasury Department and the Municipalities

The Puerto Rico Treasury Department (the "Treasury") recently announced that it entered into a collaborative agreement (the "Agreement") with various municipalities in order to reduce Sales and Use Tax ("SUT") evasion, with particular attention to the service industry in Puerto Rico. 

As part of the Agreement, the Treasury and the municipalities will share sensitive information.  In particular, the Treasury and the municipalities will share the amount of SUT reported by businesses in their monthly returns.  The Treasury and the municipalities will also share copies of any reports or audits carried out by the other.  Given that the SUT tax base and exemptions are similar, the Treasury and the municipalities will be better equipped to ease SUT fiscalization in order to tackle tax evasion and increase SUT revenues.

The Treasury has indicated that 37 municipalities have entered into the agreement, specifically:
  • Aguada
  • Aguadilla
  • Aguas Buenas
  • Aibonito
  • Arecibo
  • Arroyo
  • Barceloneta
  • Cabo Rojo
  • Caguas
  • Carolina
  • Ceiba
  • Coamo
  • Dorado
  • Fajardo
  • Guayanilla
  • Hatillo
  • Hormigueros
  • Humacao
  • Isabela
  • Jayuya
  • Juana Díaz
  • Juncos
  • Lajas
  • Naranjito
  • Orocovis
  • Sabana Grande
  • Salinas
  • San Germán
  • San Lorenzo
  • Toa Baja
  • Trujillo Alto
  • Vega Baja
  • Vieques
  • Yabucoa
  • Patillas
  • Ponce
  • Río Grande
The Secretary of the Treasury, the Hon. Juan Zaragoza Gómez, has indicated that the Treasury will continue to aggressively pursue businesses that do not remit the SUT, including the continuing issuance of tax liens, giving greater emphasis on information technology, and publishing lists of current debtors in Puerto Rico newspapers.  The Secretary added that the Agreement is just the first step in working in conjunction with the municipalities to reinforce information sharing and SUT fiscalization.

If you need further assistance in this area, do not hesitate to contact the following members of our Tax Department.

Angel D. Marrero
José E. Villamarzo
Roberto Montalvo
Mariangely González

Disclaimer:  Although the information included in this document may concern legal issues, it is not a legal opinion or professional advice and clients shall not use it as such. We assume no responsibility or liability of any kind for any information contained herein, and we expressly disclaim all liability for any claim for damages arising from the use, reference to, or reliance on, such information. If legal or other expert assistance is required, the services of a competent professional should be sought.