Puerto Rico

Social security contributions

Puerto Rico is covered under the US social security system; consequently, Puerto Rico employers and employees are subject to the US Social Security and Medicare taxes requirements. See the Other taxes section in the United States Individual tax summary for more information.

Consumption taxes

Sales and use tax (SUT)

SUT is imposed at 10.5% at the state level and an additional 1% at the municipal level, for an aggregate tax of 11.5%. See the Other taxes section in the Corporate tax summary for more information.

Net wealth/worth taxes

Puerto Rico does not have a net wealth/worth tax.

Property taxes

The property tax system is administered by the Municipal Revenue Collection Center (MRCC). The tax on real property is directly assessed by the MRCC and may be paid in two instalments. The tax, which varies depending on the municipality, is applied to an amount based on the hypothetical fair market value (FMV) of the relevant property in the year 1957. In general terms, this hypothetical FMV normally ranges between 40% and 50% of the cost of the property.

Luxury and excise taxes 

There are certain articles subject to a special excise tax, such as cigarettes, fuels, crude oils, vehicles, alcoholic beverages, cement, sugar, and plastic products, among others. See the Other taxes section in the Corporate tax summary for more information.

Payroll taxes

Puerto Rico employers are required to withhold from their employees certain payroll taxes in addition to the withholding for income tax. These payroll taxes are: Social Security and Medicare taxes, disability benefits tax, and chauffeur's and other employees' employment security tax. There are also payroll taxes only borne by the employer and should not be deducted from the employee's wages, such as: unemployment insurance tax (Puerto Rico and Federal) and workmen's accident compensation insurance tax.

All payroll taxes are required for Puerto Rican resident individuals. However, some payroll taxes may also be required for Puerto Rican non-resident US citizen or foreign national individuals.