Should vendors in Puerto Rico receive a W-9 form?

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There isn't a simple yes or no answer to your question. Your reporting requirements vary depending on the entity you are paying as well as the service being performed.

For instance, if you are doing business with a Puerto Rican national (individual, not a business), then you need to obtain a W-9 because Puerto Rican nationals are considered U.S. citizens.

However, entities formed under Puerto Rican law are considered foreign persons and are subject to the rules of foreign reporting. Meaning you may be required to ask for a W-8 instead of a W-9.

If the vendor you are setting up is a Puerto Rican entity (a business, not an individual), then you only have to report payments made if the work you are paying for was performed in the United States. In this scenario, you would need a form W-8 from the vendor and would report payments on a form 1042S. A W-9 would not be required.

But, if the Puerto Rican entity is incorporated in Puerto Rico and doing the work in their country - this includes selling tangible personal property to U.S. entities - then you have no reporting obligations. No W-8. No 1042S. No W-9.

We recommend you call the IRS international reporting line at 215-516-2000 and provide the exact details of your relationship with the Puerto Rican vendor. Be sure to record the information agent's name and ID number, as the IRS honors the judgments made by their officers.

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