Doing Business in Puerto Rico Blog: Business Coaching, News & Developments

IVU TAX NOW SET TO BE 7% FOR ALL COVERED MERCHANTS

Beginning August 1 2007, all merchants will collect  a 7% Sales and Use Tax  (IVU) for all taxable items.  This new laws makes  it mandatory for all Municipalities to charge 1.5% in addition to the 5.5% portion destined to the central government.  Before this law, not all Municipalities were collecting the 1.5% tax.

Merchants in Participating Municipalities will pay the full 7% to the Treasury Department (Hacienda).  The rest will split payments, sending 6% to Treasury and 1% to the Municipality.

You will need your Merchant's Registration Number (MRN) to file and pay your monthly sales and use tax returns. If the Sales and Use Tax Monthly Return is filed electronically, you can pay the amount owed only in an electronic manner, to wit: a direct transfer from your bank or a debit to your bank account.

For more information contact Hacienda at:http://www.hacienda.gobierno.pr/ivu/.

NEW MINIMUM WAGE LAW POSTER

A revised Federal minimum wage poster, reflecting the  minimum wage increases, is  available free of charge on the Department of Labor’s Web site. Effective July 24, 2007, the federal minimum wage for covered non-exempt employees will be $5.85 per hour.  The minimum wage increases to $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

Employers covered by the Fair Labor Standard Act’s minimum wage provisions must post  a notice explaining the Act to all employees.

 

MUNICIPAL SALES TAX MAY NO LONGER BE DISCRETIONARY

The legislature approved on June 28, 2007 bill P C3190 to make mandatory for all municipalities in Puerto Rico the assessment of a 1.5 percent municipal sales tax. This tax applies to most consumer goods- sold, used, stored or used- but does not apply to fresh food.

Originally,  the  Sales & Use Tax (‘IVU’ in Spanish), which became effective November 15, 2006,  included a 5.5 percent sales tax  for the central government and up to 1.5 percent discretionary sales tax for local governments. Bayamón for example, was not assessing this tax. The bill is pending the Governor’s approval.