Take control of your Income Taxes with Puerto Rico’s
Act 60-2019 “Puerto Rico Incentives Code”
There are many incentives that the U.S. territory of Puerto Rico is aggressively promoting, to attract new businesses and high net worth individuals to the island. On one hand, as a territory of the United States, Puerto Rico shares citizenship, currency, and legal frame with the U.S. mainland. On the other hand, its sovereignty as a territory allows Puerto Rico to offer tax incentives that cannot be matched by any foreign country or state.
The two most popular tax incentive programs offered by the Puerto Rican government were Act 20 and Act 22, which for several years were a huge draw for the island because of the many exemptions offered.
Starting on January 1, 2020, Act 60, replaced Act 20 and Act 22. This means that they are no longer in effect, therefore all new applicants must instead comply with the requirements of Act 60.
Simply imagine all you will be able to do with your tax savings
To qualify for Puerto Rico’s Act 60 tax holidays, you must be a resident of Puerto Rico for at least 183 days during the taxable year and must not have been a resident of Puerto Rico for the 10 years prior to the Act’s effective date.
By becoming a bona fide resident of Puerto Rico, you will no longer be subject to U.S. federal income taxes on your Puerto Rico source income as you are now subject to Puerto Rican income tax laws. This, of course, is the program’s main draw.
(Act 60-2019) - Individual Investors
- 0% tax on all dividends and interest income for new Puerto Rico residents
- 0% tax on all short-term and long-term capital gains accrued after the individual becomes a bona fide resident of Puerto Rico
- 0% federal taxes on Puerto Rico source of income
- Property purchase required within 2 years after the effective date of the Grant and must be of exclusive domain and for residential use
- A contribution of $ 10,000.00 annually must be given to a certified 1101.01 PR nonprofit organization, half of which will go to the Puerto Rico-based charity of your choice
- Decree benefits secured until December 31, 2035 and may be extended for an additional 15 years
(Act 60-2019) – Export Services
- 4% corporate tax rate
- 50% exemption on municipal taxes and municipal patent
- 75% exemption in real estate and personal property taxes and on property used for export, promotion, and trade services
- 100% tax exemption on dividends from export service businesses
- One (1) employee is required if the company’s projected or actual volume of business exceeds three million dollars ($3,000,000.00)
- Decree benefits secure these rates until December 31, 2035 and may be extended for an additional 15 years
The Office of Incentives for Business in Puerto Rico (OIBPR) is responsible for the administration of all tax incentive applications under Act 60. Every tax incentive granted constitutes a contract with the government of Puerto Rico that is legally guaranteed and protected by Unites States laws and will not be affected by any future legislation.
Act 60 consolidates all of the previous tax incentives laws under one new Act, and benefits are divided into “chapters,” each one addressing a specific sector such as: Financial and Insurance Services, Manufacturing, Farming, Entrepreneurship, Logistics, Individuals, Export (Services and Goods), Hospitality, Arts & Entertainment and others.
For these and many other reasons, moving to Puerto Rico and making the “Island of the Enchantment” your new home might be the best decision you will ever make.
Call me at (787) 599-7999 or email me today and learn how owning property in Puerto Rico can save you thousands of dollars in taxes every year and provide the lifestyle of your dreams!