Process to cut tax on prepared food to 7% begins
Puerto Rico Treasury to announce requirements shortly
SAN JUAN – Puerto Rico Treasury Secretary Francisco Parés Alicea announced that work has begun to ahead of a reduction of the sales and use tax (IVU by its Spanish acronym) on prepared foods that will come in effect in October.
“As determined in Act 257 of 2018, signed by Governor Ricardo Rosselló Nevares, on the New Tax Model, as of October 1 of this year, the IVU for prepared foods will be reduced from 11.5% to 7%. We have already started discussions with the Association of Restaurants of Puerto Rico (ASORE) to delineate the parameters of the implementation and orientation for the members of the industry,” the official said.
Parés and his team met Wednesday ASORE President José Salvatella to begin to discuss the requirements for the imposition and collection of the new rate.
“The reduction of the IVU on prepared foods will benefit both consumers and business people 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 all,” Parés said.
Treasury said it has begun drafting the official publications to inform of the requirements and the process that will take place in coordination with the sector. The secretary said ASORE will support the agency to provide guidance on the importance of catching up with all the requirements, using the Unified Internal Revenue System (SURI) and the changes that must be made to point of sale systems.
“Meanwhile, we urge business owners to make sure they are up to date with their tax responsibilities with the Department,” the official said.
“We have always believed in the complete elimination of this tax on prepared foods, but we recognize that this reduction will be beneficial for consumers, industry and the Treasury. We urge the owners of food establishments to be attentive to Treasury guidelines so they can implement this change effectively at their points of sale,” ASORE’s president said.
Restaurant and prepared-food establishment owners will also be able to learn about the requirements at the 360 Service Centers and Integrated Services Centers, as soon as the publications related to the change begin to be distributed.
In Treasury’s press release, the department’s new head said that after hurricanes Irma and María, the restaurant industry and establishments dedicated to the sale of prepared food, “showed that they are an important part of our economy.”