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.BackgroundUnder Section 1033.17(a)(16) and (17) of the Puerto Rico Internal Revenue Code of 2011 (PR Code), as amended, taxpayers cannot deduct 51% of intercompany charges on the income tax return. The limitation does not apply to income derived from operations covered by a decree,...