-
Financial statements audits
Financial statement audits
-
Compliance audits
Compliance audits
-
Compilations and reviews
Compilations and audit
-
Agreed-upon procedures
Agreed-upon procedures
-
Corporate and business tax
Our trusted teams can prepare corporate tax files and ruling requests, support you with deferrals, accounting procedures and legitimate tax benefits.
-
International tax
Our teams have in-depth knowledge of the relationship between domestic and international tax laws.
-
Tax compliance
Business Tax
-
Individual taxes
Individual taxes
-
Estate and succession planning
Estate and succession planning
-
Global mobility services
Through our global organisation of member firms, we support both companies and individuals, providing insightful solutions to minimise the tax burden for both parties.
-
Sales and use tax and indirect taxes
SUT/ VAT & indirect taxes
-
Tax incentives program
Tax incentives program
-
Transfer Pricing Study
The laws surrounding transfer pricing are becoming ever more complex, as tax affairs of multinational companies are facing scrutiny from media, regulators and the public
-
Business consulting
Our business consulting services can help you improve your operational performance and productivity, adding value throughout your growth life cycle.
-
Forensic and investigative services
At Grant Thornton, we have a wealth of knowledge in forensic services and can support you with issues such as dispute resolution, fraud and insurance claims.
-
Fraud and investigations
The commercial landscape is changing fast. An ever more regulated environment means organizations today must adopt stringent governance and compliance processes. As business has become global, organizations need to adapt to deal with multi-jurisdictional investigations, litigation, and dispute resolution, address the threat of cyber-attack and at the same time protect the organization’s value.
-
Dispute resolutions
Our independent experts are experienced in advising on civil and criminal matters involving contract breaches, partnership disputes, auditor negligence, shareholder disputes and company valuations, disputes for corporates, the public sector and individuals. We act in all forms of dispute resolution, including litigation, arbitration, and mediation.
-
Business risk services
We can help you identify, understand and manage potential risks to safeguard your business and comply with regulatory requirements.
-
Internal audit
We work with our clients to assess their corporate level risk, identify areas of greatest risk and develop appropriate work plans and audit programs to mitigate these risks.
-
Service organization reports
As a service organization, you know how important it is to produce a report for your customers and their auditors that instills confidence and enhances their trust in your services. Grant Thornton Advisory professionals can help you determine which report(s) will satisfy your customers’ needs and provide relevant information to your customers and customers’ auditors that will be a business benefit to you.
-
Transactional advisory services
Transactions are significant events in the life of a business – a successful deal that can have a lasting impact on the future shape of the organizations involved. Because the stakes are high for both buyers and sellers, experience, determination and pragmatism are required to bring deals safely through to conclusion.
-
Mergers and acquisitions
Globalization and company growth ambitions are driving an increase in M&A activity worldwide as businesses look to establish a footprint in countries beyond their own. Even within their own regions, many businesses feel the pressure to acquire in order to establish a strategic presence in new markets, such as those being created by rapid technological innovation.
-
Valuations
We can support you throughout the transaction process – helping achieve the best possible outcome at the point of the transaction and in the longer term.
-
Recovery and reorganization
We provide a wide range of services to recovery and reorganisation professionals, companies and their stakeholders.
Authors:
Roxanna Saldaña Casillas, Supervisor, Tax
Yarelis Febus Collazo, Semi Senior, Tax
Excise taxes play a fundamental role in Puerto Rico's fiscal policy, impacting both individuals and businesses across various sectors. Understanding the complexities of these taxes, along with available exemptions and strategic management approaches, is essential for maintaining compliance and optimizing financial strategies.
Excise taxes in Puerto Rico are specific taxes imposed on the sale, use, consumption, importation, or manufacture of certain goods. They are different from income taxes and sales and use taxes, focusing on targeted items. These items are detailed in Sections 3020.01 through 3020.12 of Subtitle C, Chapter 2. of the Puerto Rico Internal Revenue Code of 2011, as amended, (“PR Tax Code”). All sections cited below are in relation to the PR Tax Code.
Nuances of Excise Taxes in Puerto Rico
In the table below, we have summarized the most common goods and their tax rates for a quick reference:
Exemptions and Special Considerations
For the benefit of merchants in Puerto Rico, certain goods and businesses may qualify for exemptions and special considerations under Subtitle C, Chapter 3. The Puerto Rico Department of the Treasury grants exemptions to eligible taxpayers, either through refunds or the privilege of exempting payment responsibilities. These exemptions encompass various entities or goods such as:
- Manufacturing plants
- Importers of goods
- Nonprofit institutions
- Alternative fuel vehicles
- Goods in transit for re-export or return
- Public carrier vehicles
- Goods designated for manufacturing purposes
Under Section 3020.10, importers are required to file an Excise Tax Return detailing goods imported from abroad along with the corresponding tax payment. The declaration deadline coincides with the payment due date, with exemptions for bonded dealers importing vehicles, vessels, and heavy equipment, and merchandise imported by mail and air carrier.
Excise taxes applicable to imported goods must be paid in accordance with Section 3060.01(b), as follows:
- Before the taxpayer takes possession of the product.
- Goods introduced by mail: No later than the fifth (5th) business day following the day of arrival.
- Goods introduced by a person arriving from abroad: No later than the fifteen (15th) business day following the day of arrival in Puerto Rico.
- Goods introduced by a bonded importer: No later than the tenth (10th) day of the following month after taking possession. For vehicles, the tax payment is due within six months of introduction or within fifteen (15) days of sale or use, whichever occurs first.
For goods manufactured in Puerto Rico, the tax shall be paid no later than the tenth (10th) day of the month following the manufacturing period, in accordance with Section 3060.02(b).
Regulatory and Compliance Challenges
Effective management of excise tax costs requires businesses to adopt strategic approaches that ensure compliance and minimize financial risks. A key strategy involves implementing robust compliance procedures to facilitate accurate reporting and timely payment of excise taxes. Businesses should maintain accurate records and leverage digital platforms to enhance efficiency in tax management. These practices facilitate meeting regulatory requirements and streamline operations, by reducing the risk of penalties or legal issues.
Excise taxes in Puerto Rico represent a critical component of fiscal policy. Therefore, businesses can navigate regulatory challenges effectively while optimizing financial outcomes, by understanding the nuances of excise taxes, leveraging available exemptions, and implementing strategic tax management practices. Practical engagement with legal and tax advisors, combined with adherence to compliance best practices, ensures sustainable business operations in a dynamic tax environment. By staying informed and active, businesses can not only manage excise tax costs effectively but also contribute to broader economic development goals in Puerto Rico.
Our team of tax experts is available to assist you in determining and coordinating the applicability of excises based on your day-to-day business. Contact us today to learn more about how we can help you.
