Puerto Rico – Online reporting, payment of use tax by bonded importers reinstated and effective today

November 18:  A requirement for bonded importers to declare and pay use tax on goods imported into Puerto Rico has been reinstated and is effective today, November 18, 2014.

These rules were reinstated by Administrative Determination No. 14-27 (November 6, 2014) as issued by the Puerto Rico Treasury Department.

Background

Originally, all merchants in Puerto Rico were required to comply with the new reporting requirement for imports of inventory effective August 1, 2014.

However, some merchants were not able to use the Department’s online portal—PICO—and the Puerto Rico Treasury Department temporarily suspended the new reporting requirement (by issuing Administrative Determinations 2014-15 and 2014-20 in August 2014).

Reinstated reporting, payment requirements

The reporting requirement was reinstated by Administrative Determination No. 14-27.

Under this guidance—effective November 18, 2014—bonded importers must file the monthly declaration and return for use tax on imports and pay the corresponding amount of use tax on imports through the PICO web portal.

Bonded importers may take possession of the imported property without paying the use tax on imports due, provided that the bonded importer has an available balance in its deposit account with the Puerto Rico Treasury Department. For bonded importers, the use tax return and payment are due on the 10th of the month following importation.

In addition, bonded importers that have obtained an automatic release of imported property (i.e., the temporary relief measure under which importers are allowed to pick up imported goods once the bill of lading is transmitted electronically to the Treasury Department) between November 1, 2014, and November 17, 2014—in accordance with the temporary relief rules set out by Administrative Determinations No. 14-15 and No. 14-20—must file a “supplementary declaration” through PICO no later than December 10, 2014, before filing their use tax on imports monthly returns.

The bonded importer will not be required to pay the amount due at the time of filing the supplementary declaration, provided the bonded importer has an available balance in its deposit account.

The supplementary declaration must include the cost of the imported goods for which the automatic release was obtained under the temporary relief rules.

The information provided in the supplementary declaration must match the information contained in the bill of lading and the commercial invoice.

KPMG observation

Tax professionals expect that these reporting requirements could likely be extended to all importers in near future, as originally intended. However, importers other than bonded importers are currently subject to the temporary relief rules.