Taxes for Professional Services as a Legal Professional

October 7, 2015 Leave a comment

I have posted some notes on this subject, and today I am providing a summary.

Legal services including notary services, are not being taxed. This means that, for now, whenever a legal service is paid for, no tax would be added.

On the other hand, any service delivered by a lawyer or law firm which is not tied to the license as such, IS taxable at the rate of 4% until March of 2016 when the rate increases.  An example of this would be filing documents at the property tax agency.  Such a task is not limited to lawyers and could be performed by any individual trained on the subject.  This would be a taxable service.

Now, a notary performing a closing is clearly a legal service and is not taxable.


Santiago F. Lampón

Categories: Uncategorized


September 29, 2015 Leave a comment

The Puerto Rico Bar Association just announced, that the Puerto Rico Legislative Branch approved amendments to the Sales Tax Law (“IVU”), specifically the B2B segment, to exempt all legal services from the tax.

If signed into law by the Governor of Puerto Rico, all legal services including notary services would be exempt.

I will keep you posted.


Santiago F. Lampón

Categories: Uncategorized

“Sales Tax” for professional services – October 1st is the date

September 28, 2015 Leave a comment

To all business owners out there, a reminder that October 1, 2014 marks the activation of the sales tax for most professional services, and as of the date of this writing it includes legal services.  While a strong effort is being carried forward to exclude legal services from the sales tax by September 30th, it is not clear if those efforts would be succesful.

Other than lawyers, most professionals are mandated to begin collecting sales tax as of October 1st at the rate of 4%.

It this post comes as a surprise to you and you own some type of business in Puerto Rico or which delivers to others in the island, then yo need to move quickly to understand how the above may impact your business and your tax liability.


Santiago F. Lampón

Categories: Uncategorized

Sales Tax (“IVU”) for Professional Services – October 1, 2015 is the deadline

September 15, 2015 Leave a comment

If you are in business in Puerto Rico, or if your business is located outside of Puerto Rico but delivers services in Puerto Rico, you most likely know about what I am going to cover here.  Nerverthelss, I decided to publish this brief note since this tax also affects legal services, including notary services.

Throughout my publications I communicate that I am a lawyer and a notary.  I also repeadtedly state that only a lawyer admitted to practice law in Puerto Rico can become a notary, and that only a notary can perform a real estate closing in Puerto Rico.

Begining October 1, 2015, professional services has been added to the category of products or services which pay what it is normally known as “sales tax” including lawyers and notaries.  The tax rate will be 4% trhough February 29, 2016, and it will jump to 10% begining March 1, 2016.  Some categories of services may immediately qualify for a higher tax bracket, but you need to check with your tax expert on this.

There are very few exceptions to the general rule.

Overall, contracts executed before October 1st would not be charged the taxes even if the execution of the contract will be happening after October 1st.  For example, if the parties to a closing hire a notary before October 1st for a closing scheduled for sometime after October 1st, no taxes would be levied on the services.  If the notary is engaged after October 1st for a closing happening sometime thereafter, the tax would be 4%.  if the notary is engaged after February 29, 2016, the tax would be 10%.

Please consult with your accountant, CPA or tax lawyer if you have any issues with professional services rendered in Puerto Rico, including professionals who do not reside in Puerto Rico but who deliver services to individuals or businesses in Puerto Rico.


Santiago F. Lampón

POSSESSION – A short but VERY important note

September 5, 2015 Leave a comment

Possession may be known as “50% of the law” or something like that; but always be weary of the other 50% which is ordinarily unknown.

If you are in “possession” of land in Puerto Rico, it is best for you if it is an ACTIVE possession: you do not want to be blindsided by the other 50%.


Santiago F. Lampón

Understanding Real Estate Transactions in Puerto Rico

August 27, 2015 Leave a comment

DOMESTICATION OF JUDGMENT – A New term I learned today

A few days ago I posted about the importance the meaning of words play in understanding legal procedures, specifically real estate transactions in Puerto Rico. Today, I learned about the “Domestication of a Judgement” in New York and how it relates to Puerto Rico.  The lesson was brought about by lawyer Christopher Fanning in Queens, New York.  

Mr. Fanning has a judgment issued in Puerto Rico which needs to be issued in a way that is acceptable to NY authorities.  Of course, the judgment is in a format issued in accordance with Puerto Rico laws.  He had the task of having the Puerto Rico Judgement accepted in New York.

My first thought was that I was facing a situation new to me.  Nevertheless,  as I continue to speak with Mr. Fanning, we began exchanging definitions of the various legal terms used in our respective areas.  We then  came to realize that we both knew the solution to the problem.  We just had different terms to identify this solution which kept us from “seeing eye to eye.”

Once we realized the meaning of the terms associated with the situation, we were both in a position to solve the client’s problem and go about our business.

The meaning of legal terms and their application to real estate transactions is a key element of understanding how our system works, and it is a key element to finding a solution to a given real estate problem.

Moreover and most importantly, understanding the legal terms will bring about a great sense of comfort to the parties performing the closing.

Very truly yours,

Santiago F. Lampón

PD – published with Mr. Fanning’s consent.

Monte Carmelo – A brief update

August 25, 2015 Leave a comment

I received confirmation from a good source that titles are not yet being granted in Monte Carmelo, but that lots are being in fact assigned to qualified individuals.  Who is a “qualified individual” is beyond the scope of this post, but there are well established specific requirements which need to be met in order to have a lot “assigned” to an individual as a prerequisite to title.

Individuals interested in having their rights formally recognized with regards to properties in Monte Carmelo, should not remain idle thinking this is “more of the same.”


Santiago F. Lampón


Get every new post delivered to your Inbox.

Join 543 other followers

%d bloggers like this: