Home » PR Tax Incentives » Act 73
The purpose of Act 73 in Puerto Rico is to provide an entrepreneurial environment and adequate economic opportunities to develop local industry and recognize entrepreneurship as the cornerstone for the present and future economic development of Puerto Rico.
To bolster the manufacturing sector, Puerto Rico has created an aggressive tax incentive program. Puerto Rico is focused on the manufacturing sector, as it is a major manufacturing hub in the world. Puerto Rico offers precision, experience, and the best conditions for an efficient production process.
A business exempt under the Act 73 organization using a Puerto Rico entity should not be subject to any taxes (such as a dividend tax, tollgate tax, or other similar taxes) on its income from its eligible activities in Puerto Rico.
Upon repatriation, the distributed income would be subject to the tax imposed by the jurisdiction in which the owners of the Puerto Rico entity reside.
A Marketing Incentives Fund is available to pre-qualified companies whose sales are greater than $100,000 per year and whose commencement of certified operations has been obtained. It also offers a 50% reimbursement, up to $50,000, of the costs of marketing activities to markets outside Puerto Rico for an approved campaign.
Incentives for machinery, equipment, specialized systems, and maritime transportation contribute a portion of the investment and reimburse up to 50% of the cost of machinery and equipment, up to a maximum of $50,000. The company must make a commitment to continue operating for a minimum of three (3) consecutive years as well as to comply with all the requirements of the incentives contract.
Act 73 in Puerto Rico brings incentives to eligible businesses interested in developing new projects that require the purchase and installation of specialized systems (software).
To encourage the distribution of products and services to foreign markets and the mainland US, this law offers up to 20% of the transportation costs of each container shipped from Puerto Rico to one of three principal ports (Panamá, Santo Domingo, and Jacksonville) up to $2,000.
Incentives offer financial assistance, paid on a reimbursement basis, to assist companies with infrastructure and capital improvements for the facilities leased to the Puerto Rico Industrial Company or a private building. Eligible investments include electrical substations, power generators, and fire control systems, among others.
Eligible activities that may qualify for the benefits of the Puerto Rico Act 73 include the following:
An eligible service provider is required to obtain a Tax Exemption Decree that will endure for a term of 15 years. The Tax Exemption Decree constitutes a contract between the service provider and the Government of Puerto Rico and will be unaffected by any future legislation.
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