Puerto Rico Tax Benefits – Act 20 / 22 / 60

Puerto Rico Act 60, formerly known as Act 20 and 22, offer outstanding tax incentives to bonafide residents (over 183 days), such as a flat 4% corporate tax rate for qualifying companies and 0% tax on capital gains and dividends. This makes Puerto Rico an attractive location for digital nomads, online entrepreneurs, day traders, crypto investors and high net worth individuals.

Why Puerto Rico?

Puerto Rico is a Caribbean island and an unincorporated US territory. Although it is part of the United States and the same laws apply, it has an independent tax system, where the IRS lacks taxation jurisdiction. To stimulate economic growth, Puerto Rico introduced generous tax incentives with Act 20 and Act 22.

 

Act 60 Puerto Rico Export Services Act

Formerly know as Puerto Rico Act 20, the new tax code offers corporate entities a 4% flat corporate tax rate, and no IRS reporting requirements.
Available to companies that provide services outside of Puerto Rico. This is known as ‘exportation of services’.

Among the eligible Export Service activities are the following:

  • Advertising and Public Relations
  • Call Centers
  • Consulting
  • Corporate Headquarters
  • Creative Industries (design, art, music, publications, development of apps and video games, creative education)
  • Development of Computer Programs
  • Distribution in Physical Form, through the Internet, Cloud Computing or Blockchain, Income from Licensing, Subscriptions or Charges for Services.
  • Education Services and Training
  • Electronic Data Processing Centers
  • Engineering, Architecture, Project Management
  • Hospital and Laboratory Services, including Telemedicine
  • Investment Banking and other Financial Services (including advisory and broker dealer operations)
  • Marketing Centers
  • Professional Services (law and accounting)
  • Research and Development
  • Shared Service Centers
  • Voice and Data Telecommunications

Eligible Export Commerce activities are the following:

  • Assembly, Bottling and Packaging of Products for Export
  • Commercial and Mercantile Distribution of Products Manufactured in P.R.
  • Commissions on the Sale of Products to Customers outside P.R.
  • Purchase of Products for Resale to Customers outside P.R.
  • Sale of Intangible Products to Customers outside P.R.
  • Storage and Distribution Centers

Export Services are eligible services rendered to a foreign person or entity located outside of Puerto Rico. To qualify for the qualified tax exemption, the Export Services cannot have a connection with Puerto Rico.

In general, the services will be considered to have a connection with Puerto Rico if they are, among others, related to (i) commercial or for-profit activities that have been or will be carried out in Puerto Rico; or (ii) advice regarding the laws and regulations of Puerto Rico, as well as procedures and administrative orders of the Government of Puerto Rico and its agencies. The entity engaged in an export commerce activity must generate at least 80% of its gross income from this activity.

Legal Residents can benefit from a 0% capital gains tax
Available to residents of Puerto Rico for capital gains realized after establishing residency. There is a physical residency requirement of 183 days, in a cumulative manner in any rolling one-year period.

USADefend can evaluate the tax savings of Puerto Rico in comparison to another offshore jurisdiction, bringing our expertise in both areas to offer a truly unique approach that many competitors do not possess the knowledge to present. We can analyze how they would qualify for Puerto Rico’s Act 60, the cost benefit analysis of doing so, and determine how this would be incorporated in an overall financial scenario.

Schedule a Consultation Now

Memberships

  • asociacion

Postal Address

USADefend LLC
1887 Whitney Mesa DR #9669
Henderson, NV 89014

Telephones