Wednesday, September 18, 2019

Puerto Rico Treasury to businesses: Register to offer prepared-food tax cut

By on September 6, 2019

A credit card reader (Screen capture of www.fortaleza.pr.gov)

Notifies some 17,000 establishments of compliance requisites

SAN JUAN — Puerto Rico Treasury Secretary Francisco Parés Alicea said Thursday that more than 17,000 notifications have been sent to businesses that prepare food, as these still need to comply with certain requisites to be able to offer such products at the reduced sales and use tax (IVU by its Spanish acronym) percentage that takes effect in October.

As certified IVU-withholding agents for the Treasury Department, businesses that sell prepared food, such as restaurants, will be able to collect IVU at the reduced 7 percent rate, down from the current 11.5 percent.

Besides being up-to-date with other requisites, for businesses to qualify, they must be registered under the North American Classification System (NAICS) to receive the Authorized Business Certificate of approval to sell prepared food at the reduced IVU percentage, Parés said in a release.

Treasury had sent automatic notifications Aug. 9 to businesses that qualified under the NAICS code apprising them of the requirements to obtain the Authorized Business Certificate to collect the 7 percent tax.

Businesses wishing to obtain this certificate should be up-to-date in tax filings, including IVU filings, and not have outstanding tax debt or be participating in a tax-debt payment plan, the agency chief explained, adding that businesses must also have “a fiscal terminal at each point of sale that is duly connected to the Treasury Department.”

The procedure to reduce the current 11.5 percent IVU to 7 percent on prepared food is automatic for businesses connected to the Internal Revenue Unified System (SURI by its Spanish acronym), Parés Alicea said.

“[Business owners] don’t have to visit Treasury offices to get an update on the requirements,” he said. “The messages that have been sent to their accounts explain the steps that must be taken to benefit from the adjustment of the IVU rate.”

Parés called on businesses, regardless of their aggregate sales volume, to verify that their fiscal terminals are connected properly to the department with a processor certified by Treasury. He said merchants lacking a fiscal terminal should contact any of the 13 processing companies certified by Treasury and identified in Administrative Determination 19-03, which can be accessed online, at www.hacienda.pr.gov.

He said businesses should have completed the compliance process for certification by Sept. 22, given that on Sept. 23 SURI will automatically issue the Authorized Business Certificate to collect the reduced 7 percent rate on prepared foods to qualifying merchants. The certificate will be valid starting Oct. 1, and should be placed in a visible place at the entrance of the location so consumers can identify that the business authorized to collect the reduced IVU rate.

He called on business owners to clarify any doubts by logging onto the agency’s website (www.hacienda.pr.gov) or calling 787-622-0123, option 8.