PR Tax Incentives
Advisory, Accounting, Payroll, and Tax Compliance. Taking care of Business and their Owners
Puerto Rico has created an aggressive tax incentive program to connect with the global economy in order to establish an ever-growing array of service industries and to establish Puerto Rico as an international service and trading hub center.
Services & Hub Trading – Act 20-60
Services & Hub Trading – Act 20
Puerto Rico Tax Haven
| Federal Income Tax | 0% |
|---|---|
| Tax on short and long term capital gains | 0% |
| Tax on interest income | 0% |
| Tax on dividend | 0% |
| Tax on profit distributions | 0% |
| Tax Government decree, renewable for an additional ten year | 20 Years |
| SUMMER ALL YEAR LONG | YES |
Puerto Rico Taxes
| Fixed Income Tax Rate | 4% |
|---|
Puerto Rico Tax Shelter
| Real property taxes | 100% |
|---|---|
| Excise taxes | 100% |
| Municipal license taxes | 60% |
| Personal property | 100% |
| Sales and use tax | 100% |
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Business Owners & Investors – Act 22-60
Business Owners & Investors – Act 22
Puerto Rico Tax Haven
| Federal Income Tax | 0% |
|---|---|
| Tax on short and long term capital gains | 0% |
| Tax on interest income | 0% |
| Tax on dividend | 0% |
| Tax on profit distributions | 0% |
| Tax Government decree, renewable for an additional ten year | Till 2036 |
| SUMMER ALL YEAR LONG | YES |
Puerto Rico Taxes
| Fixed Income Tax Rate | 4% |
|---|
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Manufacturing & Production – Act 73-60
Manufacturing & Production – Act 73
Puerto Rico Tax Haven
| Federal Income Tax | 0% |
|---|---|
| Tax on short and long term capital gains | 0% |
| Tax on interest income | 0% |
| Tax on dividend | 0% |
| Tax on profit distributions | 0% |
| Tax Government decree, renewable for an additional ten year | 20 Years |
| SUMMER ALL YEAR LONG | YES |
Puerto Rico Taxes
| Fixed Income Tax Rate | 4% |
|---|---|
| Intangible Property | 12% |
| Pioneer or novel product manufacture/production | 1% |
Puerto Rico Tax Shelter
| Real property taxes | 90% |
|---|---|
| Excise taxes | 100% |
| Municipal license taxes | 60% |
| Personal property | 90% |
| Sales and use tax | 100% |
Puerto Rico Tax Incentives
| Tax credit on Research and Development (R&D) Activities | 50% |
|---|---|
| Tax credit on purchases of products manufactured or recycled in PR | 50% |
| Special deductions on investments from structure, machinery & equipment | Investment Credit |
| Job created during 1st year of operations | $5,000 Per Job Created |
| First year accelerated depreciation | 100% |
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Young Entrepreneur - Act 60
Young Entrepreneur – Act 60
Eligibility
|
A Young Entrepreneur is a Resident of Puerto Rico whose age fluctuates between sixteen (16) and thirty-five (35) years of age, interested in creating and operating a new company in the long term, for an indefinite time and has obtained a diploma superior school or certification equivalent of the Department of Education of Puerto Rico, or pursuing studies and present evidence that certifies that he is pursuing studies leading to obtaining a certificate or diploma. A Young Entrepreneur who has not begun operations and signs a Special Agreement for the Creation of Companies with the Secretary of the DDEC can enjoy the economic benefits. |
Benefits
| Term of the Decrees | Decrees of exemption will have a term of 3 years. |
|---|---|
| 0% Fix Net Income Tax Rate | The eligible activities will be subject a preferential tax on net income of a zero percent (0%), in place of any other income tax, on the first five hundred thousand dollars ($500,000) of its net income tax, the excess will be subject to the ordinary rates. The funds from an insurance policy for the concept of interruption of business (business interruption) to cover the eligible activities will also be considered. |
| 0% Federal Income Tax of 0% | The eligible activities will not be subject to any US Federal Income Tax on income source in Puerto Rico. |
| 100% Exemption on Property Tax | Real Estate and Personal Property will be fully exempt (100%) regardless of any amendment later made in the Decree. |
| 100% Tax exemption on Municipal License Taxes | The gross income of eligible activities will be fully exempt (100%) of municipal taxes, including on the municipal license and any other taxes imposed by any municipal ordinance. The Municipal license tax rate that applies is the rate as of the date of the signature of the Decree, regardless of any amendment made later on. |
| Dividends or profit distributions | The shareholders or partners in a domestic corporation or company that owns a Decree will be subject to tax on distributions of dividends or profits. |
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White Papers
Doing Business In Puerto Rico
Based on our more than 10 years of experience with new incomers we have prepared several white papers with insights about doing business in Puerto Rico and available tax incentives to establish Puerto Rico as an international service and trading hub center.
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Doing business in Puerto Rico can be both gratifying and profitable. If the process seems overwhelming and confusing, contact us for a consultation.
International Tax Planning Services
Tax Structure Analysis
International Tax analysis is a complex and risky undertaking. These days businesses also have to contend with international economic transactions that have complex and ever-growing regulatory oversight. We can help you structure your business in a tax-efficient manner, construct effective cross-border strategies, and manage your global structural tax rate.
Transfer Pricing
Transfer pricing rules typically require related entities to compensate each other appropriately so as to be commensurate with the value of the property transferred or services provided in an inter-company transaction.
Arm’s Length
Intellectual Property Valuation
The goal of valuation is to identify the fairest and most realistic method of calculating the value of Intellectual Property based on current market conditions, reflecting today’s global and economic realities, and minimizing regulatory risk and uncertainty.
