Income tax in Puerto Rico
Puerto Rico levies an income tax of 0-33%, depending on your income. On top of that, federal income tax applies.
Corporate tax in Puerto Rico
Puerto Rico levies a corporate tax of 5-37.5%. On top of that, federal corporate tax applies.
Sales tax in Puerto Rico
The US has no European-style VAT. Instead, states, counties and municipalities levy a local sales tax on sales of goods (but not services).
Sales tax rate in Puerto Rico
The sales tax (IVU) in Puerto Rico is 10.5% at the territory level. Municipalities add another 1%, so the combined rate is 11.5%.
Puerto Rico nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
January 1, 2021
Included transactions:
Total gross sales delivered into the territory
Treatment of exempt sales:
Exempt sales count toward the threshold
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to the seller's fiscal year
Additional information:
- Registration requirements: TBD.
- Regulation No. 9237
Puerto Rico marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
August 1, 2020; economic nexus as of January 1, 2021
Economic nexus threshold:
Total gross sales in the territory of at least $100,000 or 200 separate transactions during the seller's fiscal year. When calculating the threshold:
Marketplace facilitators should include all sales made through the marketplace, including sales by related parties and marketplace sellers.
Marketplace sellers should exclude sales made through a collecting marketplace.
Registration requirements:
- Remote multichannel sellers: Once you exceed the economic nexus threshold, you must register with the Puerto Rico Department of the Treasury and collect Puerto Rico sales tax on your direct sales.
- Remote marketplace sellers: You don't need to register if the marketplace facilitator collects and remits Puerto Rico sales tax on your behalf.
- In-state multichannel sellers: You must register with the Puerto Rico Department of the Treasury and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You may need to register; contact the Puerto Rico Department of the Treasury for details.
- Learn more here.
For an overview of every state, see our directory US states at a glance. Our guide Which US state is best for your company? helps you pick the right state, and the guide to forming a US company walks you through the process. And if you want to run your US LLC tax-free without a US permanent establishment, our sister site zerotax.llc is the place to go.
How we help with Puerto Rico:
Puerto Rico is a US territory with its own tax law. Whether a company there or in one of the states fits your plans is something we work out together in a US company formation consultation. With us you can form your company in six states; you'll find the options and fees under US Company Formation.