For purposes of this incentive, an eligible business is any entity with a bona fide office or establishment located in Puerto Rico that exports its products or services with no less than 80% of gross income on eligible activities. This incentive offers on the net income of the eligible activity, numerous tax benefits such as 4% preferential tax, 0% on federal tax, 100% tax exemption on dividends or profit distributions and 75% on property tax to name just a few. The income generated from eligible activities carried out in Vieques and Culebra will enjoy an exemption decree that will have a term of 15 years with a possible renegotiation of 15 additional years.
Our White Paper on Export Trade and Hubs Chapter 3 Subtitle B of the new code (formerly Act 20) summarizes the key concepts of this incentive and describes all the tax benefits that may be available for eligible businesses.
