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Puerto Rico value added tax takes effect April 1, 2016

Puerto Rico will soon replace its existing state-level sales and use tax with a value added tax  (VAT) system. Despite early indications that the transition would be delayed, the government has indicated that the implementation will take place in two major phases on April 1, 2016, and June 1, 2016. The VAT will be assessed at a rate of 10.5%, with an effective total tax rate of 11.5% on many transactions when combined with the municipal sales and use tax of 1%.

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