Treasury starts processes to reduce sales and use tax on prepared foods to 7%
The Puerto Rico Treasury Department has begun to implement the reduction of the Sales and Use Tax (IVU, for its initials in Spanish) on prepared foods from 11.5% to 7%, which will take effect in October.
“We have already started conversations with the Puerto Rico Restaurants Association to delineate the parameters of the implementation and orientations for industry members,” Treasury Secretary Francisco Parés said, adding the change was determined by Law 257 of 2018.
Parés and his team met with ASORE President José Salvatella, to begin to discuss, mainly, the requirements for the imposition and collection of the new rate.
“The reduction of the IVU on prepared foods will benefit both consumers and merchants, because we anticipate that this will be an incentive to increase visits to these establishments. Our work is focused on delineating an effective transition for everybody,” Parés said.
After Hurricanes Irma and María, the restaurant industry and establishments dedicated to the sale of prepared food, “showed they are an important part of our economy,” he said.
Treasury has begun drafting the official publications that will outline the requirements that must be met, and the processes will be worked on in coordination with members of the restaurant sector.
ASORE will support the agency to provide guidance on the importance of becoming current with all of Treasury’s requirements through the Unified Internal Revenue System (SURI, for its initials in Spanish) and the adjustments that should be implemented in the collection systems.
“Meanwhile, we urge merchants to make sure they are up to date with their tax responsibilities with Treasury,” he said.
“We have always believed in the total elimination of this tax on prepared foods, but we recognize that this reduction will be beneficial for consumers, industry and the public coffers,” Salvatella said.
“We urge food establishments owners to aware of Treasury’s guidelines so that they can implement this change effectively in their points of sale,” he added.
Restaurant and prepared food establishment owners can also seek information at Treasury’s 360 Service Centers and Integrated Services Centers, as soon as distribution of publications related to the change in the IVU rate starts.