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VAT rates in Puerto Rico

Quick overview

Standard Rate Reduced Rate Other Rates
10.5% 4% & 7% Exempted

The local name for VAT in Puerto Rico is HERE.

There are basically 4 VAT rates in Puerto Rico:

  • Standard VAT rate is 10.5%
    • The 10.5% is the State Tax and is increased by a 1% Municiapl Tax
  • Reduced VAT rates are 4% & 7%

Recent developments

For more information about (recent) rate change developments in Puerto Rico, please click HERE.

Standard rate: 10.5%

This rate applies for all transactions that take place in Puerto Rico, unless an exception applies (such as a reduced rate, the zero rate or an exemption, or a reason to treat the transaction as outside scope of VAT).

Reduced rate: 4%

  • B2B Services
  • Professional services

Reduced rate: 7%

  • Prepared food

Exempted

  • Certain food items
  • Funeral services
  • Prescription medicines
  • Machinery and equipment used in exempt manufacturing operations
  • Medical-surgical material
  • Childcare centers
  • Commercial and residential real property leases
  • Printed and electronic books
  • Feminine personal hygiene

A global VAT/GST rate overview can be found here (note this is a work in progress).

This post was last updated on November 4, 2021.

See also Global VAT/GST rate overview

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