Registration and Filing Requirements of Entities and Individuals Doing Business in Puerto Rico

The Puerto Rico Treasury Department (“PRTD”) issued Informative Bulletin 07-26 to alert new entities and individuals that have begun or that will begin doing business in Puerto Rico after the impact of hurricanes Irma and Maria of their obligation to register with the PRTD. The requirements established by the Puerto Rico Internal Revenue Code of 2011, as amended (the “Code”), and its regulations include, but are not limited to the following:

• Registration with the PRTD to notify the Employer’s Identification Number (“EIN”) issued by the Internal Revenue Service (“IRS”) for purposes of income and payroll tax compliance.

• Registration with the PRTD’s Merchants Registry to obtain the Merchant’s Registry Certificate for Sales and Use Tax (“SUT”) purposes.

In addition, entities and individuals may be required to file monthly, quarterly, and/or annual returns and to comply with all the requirements as a withholding agent. Failure to comply with these requirements may result in penalties imposed.

Please note that depending on the operations, there will be filing requirements with other governmental agencies that could apply to these entities and individuals. Some of these agencies are the Internal Revenue Service, the Department of State, the State Insurance Fund, the Department of Labor, the Municipal Revenue Collections Center, and the different municipalities, among others.

Entities and individuals must review the facts and circumstances associated with the structure of their operations in Puerto Rico. The Code also provides guidance on determining if an entity or individual is engaged in a trade or business and if it should be considered a “merchant” for SUT purposes.

To view the original Bulletin issued by the PRTD click the following link:

Internal Revenue Informative Bulletin 07-26