Partial Exemption of SUT on Prepared Meals


One of the changes brought by Law 257 of December 10, 2018, known as the Tax Reform, is the exemption from the collection and payment of the IVU Surtax on Prepared Meals.  This represents a reduction of 4.5% on SUT collected and paid; a deduction from 11.5% to 7%.  The application of this amendment will be in effect on October 1, 2019.  It covers those businesses classified as restaurants engaged in selling prepared meals.  The Reduced IVU only applies to taxable items considered as prepared meals, carbonated beverages, pastries, and sweets.  It does NOT apply to alcoholic beverages.

The term “restaurant” is defined as any commercial establishment, which includes food trucks, engaged in the business of providing food and beverage to be consumed either outside or at the establishment and served hot or with eating utensils such as plates, knives, forks, spoons, drinking glasses, cups, napkins, or straws.

Law 257-2018 also states that restaurants must obtain the appropriate authorization and certification from the Treasury Secretary that qualifies them for such reduction.


Eligibility Requisites to Obtain the Authorization for the Collection of the Reduced IVU on the Sale of Prepared Meals


The Treasury Department (TD) issued Administrative Determination No. 19-03 to explain the qualifying requisites for the SUT Reduced Tax; as well as the procedure through which the certification will be granted.

In order to be eligible, all merchants must comply with the following requisites:


  1. The merchant must possess a valid Merchant Registration Certificate that must show one of the following codes from the North American Industry Classification System (NAICS):
  • 72231 – Meal Services by Contract
  • 72232 – Meal Services for Events
  • 72233 – Meal Mobile Services
  • 72241 – Bars and Snack Bars
  • 72251 – Restaurants and other eating places


  1. Compliance with the Filling of SUT Tax Returns and Declarations

The merchant must be current on the payment and filing of all tax returns and declarations regarding SUT.  In order to make sure he is in compliance; the merchant may request through SURI a Certificate of Filing of SUT Tax Returns.


  1. Compliance with Payment of Tax Debts

The merchant must not have any outstanding tax debts with the TD. In case they have any debt, it must be carried out under a payment plan previously agreed with the TD, and the merchant must be up to date with the payments. Therefore, the merchant must request a Negative Debt Certification.


  1. Keep a Fiscal Terminal on each one of the Points of Sale

The merchant must comply with the requirement of installing, possessing, and keeping fiscal terminals at each one of the points of sales on all commercial localities he owns, no matter the number of sales.  These terminals must comply with the established specifications.

Merchants must contact any of the TD’s certified processors and coordinate the installation of such terminals.  The TD will only grant authorization to those merchants that have a terminal connected by a certified processor.  The TD encourages merchants to contact the processors and make sure their terminals are transmitting the information to the TD using the registry number of the commercial locality.



Process for Obtaining the SUT Reduced Tax Authorization


On Monday, September 23, 2019, all merchants that comply with the requisites will be able to obtain through their SURI accounts the certificate titled “Authorized Merchant-Reduced Prepared Meals Tax”.

The certificate authorizes the merchant that from October 1, 2019, he is able to collect the Authorized Merchant-Reduced Prepared Meals Tax.  The certificate must be placed in a visible place at the entrance of the establishment so that the customer recognizes it is an authorized business for the collection of the SUT Reduced Tax.

All certificates will be in effect until September 30, 2020, no matter on which date it was granted.  However, on September 30 of each year, those merchants that continue to comply with the requisites will to receive an automatic extension through SURI of their certificate for the following year.

Merchants that do not receive the confirmation notice may request through SURI the reasons for which it was denied.  On September 24, 2019, and once the merchant is up to date with the requisites shown on the notice, he may be able to request the Certificate through SURI.


NOTE:  At TCG we can help you to:

  • Collect the data needed to comply with the requisites.
  • Gather the information on the TD’s certified processors of the fiscal terminals and handle the installation.
  • Process the necessary paperwork to obtain the authorization and certification from the TD.


At TCG we have the resources and experience to help you, contact us today.


Schedule a Free Consultation

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