Taxpayers must submit informative returns to deduct payments made for covered services

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January 2020

Overview

On December 9, 2019, the Puerto Rico Department of Treasury (PRTD) issued Administrative Determination 19-08 (AD 19-08) to shift the requirement to issue informative returns with respect to payments for certain services from the service provider (the Service Provider) to the recipient of such services (the Service Recipient) for calendar year 2019 only. In addition, AD 19-08 provides that the Service Recipient must issue such informative returns to the Service Provider to be able to claim a deduction in its 2019 PR income tax returns in connection with the payment for such services.

The takeaway

AD 19-08 is an exception that applies only for calendar year 2019 to grant Service Providers additional time to update their systems and obtain the necessary data to comply with the provisions of the PR-IRC. Therefore, for payments received after December 31, 2019, any entity engaged in providing Covered Services will be required to provide Form 480.7E to its clients to report amounts received during the year for such services.

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Doug McHoney

International Tax Services Leader, PwC US

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