In Circular Letter (CL) 18-07, the Puerto Rico Treasury Department provides merchants that are non-withholding agents with guidance on how to file quarterly reports on sales of tangible personal property made to Puerto Rico buyers for quarters that began on January 1, 2018. (For more information regarding the non-withholding agent filing requirement, in the context of the sales and use tax (SUT) obligations, enacted as part of Act 25-2017, see Tax Alert 2017-0824.) As part of the information required to be reported, the non-withholding agent must provide a description of the purchased merchandise, among other data.

April 30, 2018 — First quarterly report due date

Non-withholding agents must file the quarterly report on April 30, 2018, for the quarter that began on January 1, 2018 and ended March 31, 2018. Non-withholding agents must file the report through the electronic filing system (SURI). CL 18-07 sets forth the steps non-withholding agents must follow to file the report.

Failing to file the quarterly report may result in the imposition of a $5,000 penalty under Section 6043.06(e) of the Puerto Rico Internal Revenue Code of 2011 (PR Code), as well as any other penalties in the PR Code.

Voluntary agreement to become withholding agents

Non-withholding agents may enter into a voluntary agreement with the Puerto Rico Treasury Secretary to collect the sales and use tax. Non-withholding agents that have an agreement with the Secretary will not be required to file the quarterly reports.

Implications

The quarterly reports must include a statement that the non-withholding agent has notified its purchasers of their SUT reporting and payment obligations (i.e., the non-withholding agent sent purchasers an annual notice). The statement, the annual notice to purchasers, and the quarterly report are the key reporting requirements for non-withholding agents.

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