One of the key objectives of the Code is to offer manufacturing, research and development and high technology industries incentives so that they can preserve and expand their investment in Puerto Rico. Among the tax benefits that are available is a preferential 4% tax rate on net income, no federal income tax on income sources in Puerto Rico, 100% tax exception on dividends or profit distributions to shareholders, 75% exemption on Property Tax and 50% on Municipal License taxes as well as 100% exemption on capital gains, to name only a few.
Also, the DDEC will be granting tax credits through an incentive contract with the exempt business to maximize their economic impact, the return on fiscal investment and their performance. These tax credits will be granted to exempt businesses that have a Decree.
Our White Paper on Manufacturing, including the Research and Development, Chapter 6 of Subtitle B of the new Code of Incentives (formerly Act 73) summarizes the key information that any manufacturing or research and development business must know in order to qualify for the incentives and tax credits.