06 Aug Sales Tax Reduction for Restaurants and Prepared Foods

On August 2, 2019, the Puerto Rico Treasury Department (“PRTD”) issued Administrative Determination Number 19-03 (“AD 19-03”) providing guidelines and requirements to reduce the sales and use tax (SUT) from an 11.5% to 7% for restaurants and the sale of prepared foods, carbonated beverages, pastries, and candy.

REQUIREMENTS

To qualify for the reduced SUT, the restaurant will need to abide by the following:

Merchant Registry Certificate – the merchant should have in place a valid Merchant Certificate including any of the following NAICS:

72231 – Food Service Contractors
72232 – Caterers
72233 – Mobile Food Services
72241 – Drinking Places
72251 – Restaurants and Other Eating Places

Filings – Merchant must have complied with the filing of all the SUT returns and applicable declarations.

No Debts – Merchant should not have any outstanding debt with the PRTD unless it is under a payment plan.

Fiscal Terminal – Merchant must comply with the requirement of installing and maintaining a Fiscal Terminal in each point of sale regardless of their annual sales volume.  Merchants that do not have a fiscal terminal should contact any of the processors certified by PRTD (refer to the AD 19-03 for the list of processors).

PROCEDURES

On September 23, 2019, merchants that comply with all the requirements established by the PRTD should automatically gain access to a Reduced Rate Certificate (“The Certification”) for each commercial location through their SURI account. The Certification will authorize the merchant to charge a reduced SUT of 7% beginning on October 1, 2019. The Certification will be valid through September 30th, 2020 (regardless of when it is issued), and must be prominently displayed on the entrance.

Need more information?

Our tax and compliance experts at Galíndez, LLC will be glad to assist: info@galindez.com