On 4 April 2019, the Puerto Rican Department of Treasury issued a Circular Letter No. 19-10 regarding new quarterly tax return for withholding Payments for services provided, using a new quarterly return form(Form 480.6 SP-1).
The circular letter clarifies that requirement to submit a quarterly tax return for any taxpayer is required to withhold and remit 10% on income from services. The return is to be filed by the end of the month following each quarter, although the Circular Letter indicates that for the first quarter of 2019 ending 31 March, the deadline is 31 July and the returns for both the first and second quarter are due 31 July. The return must be filed via the Unified Internal Revenue System.
The Circular Letter further states that although the remittance of tax withheld on services is generally due by the 15th day of the month following each month if the total tax withheld for a quarter is less than $ 2,500 and withholding tax can be remitted at the time of the quarterly return.
Withholding tax is generally applied to payments made by persons involved in a trade or business or generating income in Puerto Rico for services provided in Puerto Rico by a corporation, partnership or private person. It serves as a creditable advance payment of income.
The provisions of this Circular Letter have immediate effect on July 31, 2019.
