Puerto Rico issues guidance for complying with the requirement to submit a transfer pricing study

The Puerto Rico Treasury Department (PRTD) has issued guidance (Administrative Determination (AD) 21-05) for complying with the requirement to submit a transfer pricing study to claim expenses paid to related entities that do not carry out operations in Puerto Rico or have a home office located outside of Puerto Rico (intercompany charges) on the income tax return.

Background

Under Section 1033.17(a)(16) and (17) of the Puerto Rico Internal Revenue Code of 2011 (PR Code), as amended, taxpayers can…