Puerto Rico - New sales and use tax requirements for importers, merchants; electronic transmittals of import manifests now required 

July 23:  Importers and merchants must register with the Puerto Rico Treasury Department for sales and use tax purposes. Importers must register before the end of July 2014, and merchants must register by August 1, 2014.

Starting August 1, 2014, all merchants importing goods into Puerto Rico will be required to submit an electronic declaration for each import as a prerequisite for obtaining a release of the merchandise at the port of entry.

Background

Act 80-2014 amended various provisions of Puerto Rico’s Internal Revenue Code (2011) to establish that effective August 1, 2014, all tangible personal property subject to the payment of the sales and use tax—imported into Puerto Rico for use, consumption or resale—will be subject to the payment of the sales and use tax.


Also, a provision requires merchants to declare and pay the sales and use tax online.


The Puerto Rico Treasury Department has developed a new integrated portal to manage all the transactions relating to the sales and use tax—and the use tax imposed on imported merchandise—and has issued guidance concerning the requirements for the electronic transmission of manifests for carriers and that extends the validity of Reseller and Municipal Sales and Use Tax Exemption Certificates.


The following discussion provides summary overviews of the provisions in the guidance items—Circular Letter 14-04, Circular Letter 14-05, and Administrative Determination 14-10.

Circular Letter 14-04 - Merchant’s integrated portal (PICO)

The new web-based application that permits taxpayers to report their sales and use tax-related transactions online is PICO (Spanish and English).


PICO first became operational July 18, 2014.


All importers are required to register in PICO on or before July 31, 2014. All other merchants must register on or before August 1, 2014.


On PICO, registrants are able to:


  • File a use tax declaration (Form SC 2970), in order to obtain the merchandise release authorization (i.e., allowing for release of the goods at the port of entry)
  • File the new monthly use tax return (form SC 2915D) due on the 10th day of the month following imports
  • File the monthly sales and use tax return (Form SC 2915A) which will be due on the 20th day of the month following the sales; the sales and use tax return will be filed by the legal entity, instead of by each commercial location
  • Pay any sales and use tax due with the above-listed declarations
  • Have access to the historical filing of declarations and returns
  • Have access to verify the “merchant’s registration number” and the access PIN
  • Have access to complete and file the request for the “merchant’s registration number” and to obtain the PIN
  • Complete the registration of IVU lotto

PICO user creation

A merchant must create a PICO account and add certain company information. To register a company, PICO requires certain key information including:


  • The company’s employer identification number (EIN)
  • The merchant’s registration number (if more than one, only one is used)
  • The PIN that the Puerto Rico Treasury has assigned to the merchant registration number

If there is more than one locality for a merchant, only one will be entered. A user will be able to view all localities that are registered under the company’s employer identification number.


The account administrator can grant access to other users for the preparation of the declaration of products imported, tax return preparation, other filing and payments on behalf of the merchant.

Use tax declarations

Starting August 1, 2014, all merchants importing goods into Puerto Rico are required to submit an electronic declaration on each import as a requirement in order to obtain a release of the merchandise at the port of entry.


  • Resellers - With respect to resellers, the new system: (1) eliminates the eligible wholesaler certificate and eligible manufacturer certificate; and (2) provides that a credit for sales and use tax paid on purchases will apply only for resellers.
  • Importers are required to file a new return on imported goods on or before the 10th day of the month following the import.

Circular Letter 14-05 - Information required in electronic transmission of manifests

Effective August 1, 2014, every duly licensed carrier will be required to transmit their manifests electronically to Treasury’s Consumption Tax Bureau through SISCON (the Spanish acronym for Treasury’s tax systems).


For the electronic transmission of manifests, carriers are required to provide certain information:


  • The consignee’s employer identification number or social security number
  • The merchant’s registration number of the consignee, as applicable
  • The merchandise's identification under the U.S. Harmonized Tariff Schedule HTSUS codes
  • Detailed description of the imported merchandise

Carriers are required to transmit the manifests at least 24 hours before the estimated hour of arrival of the merchandise into Puerto Rico and no later than one day before the introduction date provided in the bill of lading.


Once the transmission of the manifest is completed by the carrier, and revised by Treasury, a copy of the bill of lading included in the manifest will be available on PICO which will allow consignees to choose the bill of lading in order to prepare and file the corresponding declaration. Consignees must comply with these requirements in order to obtain a release of the imported property.


Amendments to shipping documents must be completed via e-mail correccionce@hacienda.gobierno.pr within 48 hours after any error is discovered.

Administrative Determination (AD) 14-10 - Extension of validity of Reseller and Municipal Sales and Use Tax Exemption Certificates

The Puerto Rico Treasury Department extended the validity of Reseller and Municipal Sales and Use Tax Exemption Certificates, including those issued provisionally in 2013, expiring during 2014, and established the requirements and due date for filing an application for the renewal of the certificates.


Pursuant to AD 14-10, certificates set to expire during 2014 will remain valid through December 31, 2014.


Resellers must request renewal of their certificates no later than October 31, 2014, in order for the Puerto Rico Treasury Department to issue the new certificates for 2015 no later than December 15, 2014.


For purposes of the 1% municipal sales and use tax exemption, merchants are to treat those certificates with a set to expire during 2014 as valid until December 31, 2014.



For more information, contact a tax professional with KPMG in Puerto Rico:


Rolando Lopez

(787) 622-5330


Carlos Molina

(787) 622-5311




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