By Janira Beltrán-Sellés, Esq. & Xiomara Del Toro-Díaz, Esq., CPA
Act 57-2020 granted a temporary exemption on the collection of sales and use taxes applicable to services rendered among merchants and designated professional services (4% IVU) invoiced during the months of April, May and June 2020. Said Act also granted the Secretary of Treasury the authority to extend the exemption for three additional 3-month periods, while the COVID-19 emergency lasts, but not beyond December 31, 2021.
Puerto Rico Department of Treasury’s Circular Letter No. 20-33 (CC 20-33) states that merchants who, prior to July 16, 2020 (the approval of AD 20-33) have invoiced, withheld and paid to Treasury the 4% sales and use tax and reported it in their monthly sales and use tax returns for April, May or June 2020, may amend their returns to report the services as exempt from the 4% tax. The amendment must be submitted via SURI with specific evidence detailed in CC 20-33.
By means of CC 20-33 the Secretary of Treasury also announced that he will not be exercising his authority to extend the exemption period beyond June 30, 2020.
Also, Puerto Rico Department of Treasury’s Administrative Determination 20-17 (AD 20-17) postponed the effectiveness of the requirement for lessees of real property for commercial purposes to have in place a sales and use tax fiscal terminal, pursuant to Section 6054.03 of the Puerto Rico Internal Revenue Code (Code). This requirement was imposed by Act 257-2018 as a condition to claim a sales and use tax exemption of the lease payments. It had been postponed by Administrative Determination 19-05 until June 30, 2020 and is further postponed by AD 20-17 until June 30, 2021.
Thus, as of July 1st, 2021, every lessee of real property for commercial purposes must have a fiscal terminal in place, pursuant to Section 6054.03 of the Code, in order to be able to claim an exemption pursuant to Section 4030.14(b) of the Code. The Department of Treasury announced that it will soon issue a publication with details regarding the certification that lessees must present their lessors to claim the exemption.
This publication is a summary of recent pronouncements referred to herein and is not intended to substitute legal advice. We encourage you to contact us or your tax advisor if you have any questions or need assistance regarding any of the matters presented herein. An attorney-client relationship with Pellot-González, P.S.C. cannot be formed by reading or responding to this memorandum. Such a relationship may be formed only by express agreement with Pellot-González, P.S.C.
