Value Added Tax (“VAT”)

1. The following transactions are now excluded from the VAT:

1. The right to use intangibles;
2. Services rendered by a merchant outside Puerto Rico to a tax exempt entity under Act 73-2008, Act 83-2010, Act 20-2012, Act 55 of May 12, 1933 or the National Bank Law, provided that both the provider and recipient of the service are part of a controlled group of corporations or a related group of entities and
3. Services rendered to any entity whose organic law exempts it from all taxes

2. The following are additional exemptions provided by Act 159-2015:

1. The sale of articles and services to bona fide farmers;
2. Certain legal services, except those services that can be provided by other professionals (i.e. tax consulting and human resources consulting);
3. Services rendered to homeowners’ associations (“HOA”), councils of unit owners or proprietary associations and certain housing unions, if at least 85% of its units are used for residential purposes;
4. Services provided to certain social interest housing projects;
5. The retail sale of electric power equipment;
6. Airships repair, maintenance and commissioning services rendered by an entity with a tax grant under Act 73-2008;
7. Toll manufacturing and contract manufacturing services;
8. Maintenance fees paid under timeshare or vacation club ownership plans;
9. Services rendered to a person exclusively engaged in the storage or processing of gasoline, aviation fuel, jet fuel, gas oil, diesel oil, crude oil, unfinished oils and end products derived from oil and other hydrocarbons mixture, if the storage and handling of the fuel is undertaken in a Foreign Trade Zone;
10. Services rendered to a merchant engaged in the generation and sale of electric power on a commercial scale;
11. Services rendered to an entity with a tax grant under Act 73-2008 that is engaged in the repair, maintenance and commissioning of airships;
12. Services rendered to any entity whose organic law exempts it from all taxes.