To allow service providers more time to comply with new filing requirements, the Puerto Rico Treasury Department (PRTD) has determined (Administrative Determination 19-08) that recipients of telecommunications, internet, insurance premium and television services must prepare and file Form 480.7E, Advertising, Insurance Premiums, Telecommunication, Internet, Access and Cable or Satellite Television Services, for tax year 2019. The recipients must file Form 480.7E on or before February 28, 2020, through the PRTD's electronic filing platform, named SURI by its Spanish acronym. (For more information on the 2019 informative returns, see Tax Alert 2019-2124.)

To allow the recipients to file timely the form, the service providers must provide the following information to the recipients on or before January 30, 2020:

• Complete name of the individual or entity providing the services
• Physical and postal address
• Social Security number or employer identification number

Because Administrative Determination 19-08 applies for only one year, service providers must file Form 480.7E for calendar year 2020 and thereafter.

Implications

Taxpayers making payments for these types of services must file this form for tax year 2019 so that they can deduct these expenses for alternative basic tax (ABT), in the case of individuals, and the alternative minimum tax (AMT) in the case of businesses, to the extent they are subject to those taxes. This reporting requirement is not clearly linked to the ABT or AMT provisions. Administrative Determination 19-08, however, sets forth the PRTD's interpretation and position that the reporting by the payors is required to claim the deduction. Accrual-basis taxpayers may be required to reconcile, on the income tax return, the amounts paid as reported and the expenses claimed. The reconciliation requirement, however, is waived for those that must include audited financial statements with their returns.

———————————————