No doubt that Puerto Rico offers outstanding incentives to move to the island. To enjoy the benefit from the tax incentives, you are required to meet certain requirements, though. Just declaring the United States territory your new home is not sufficient. Let’s check out the Puerto Rico benefits and take a look at how to qualify for them.
The United States vs. Puerto Rico Taxes
Thanks to Section 936, Puerto Rico sourced income is not a part of United States taxation. Puerto Rico citizens only pay PR taxes on their income source on the place. Moreover, to attract investment, this place enacted two tax acts, including Act 20 and Act 22. These two acts offer low tax or no tax on specific types of income.
- Export Services Act, Act 20: 4% business tax rate for Puerto Rico services organizations
- Individual Investors Act, Act 22: 0% capital gain tax for Puerto Rico citizens
Recently, these two acts were modified and combined in a new law that is Act 60. However, the prices for corporate taxes as well as capital gains tax remain the same.
Act 60 is suitable for high net worth business owners with service businesses and for traders with high capital gains such as crypto gains.
Puerto Rico Act 60
The low 4% corporate tax rate required by Act 60 applies to businesses that perform services on the place to customers as well as clients outside the island. It means the service has to be transferred to non-PR individuals or foreign companies that have no nexus with this place. The service can’t be connected to a trade, business, or other activity on the island.
Eligible businesses Act 60
To get the benefit from the low 4% business tax rate, the business should meet specific requirements. The thing is that the business has to provide service. It means that manufacturing or other non-service companies do not qualify.
Eligible services contain several things, including:
- Software development
- Research and development
- Consulting and advisory services
- Hospital, laboratory, and medical tourism
- Investment banking and other financial services
- Project management, engineering, and architectural services
- Educational and training services
- Professional services such as tax, legal, and accounting services
- Shared services, such as accounting, human resources, communications, electronic data processing, finance, taxes, auditing, engineering, marketing, quality control, and other centralized management services
- Graphic design and other graphic and commercial art services
- Data processing centers
- Corporate headquarters
- Call centers
- Trading companies dedicated to international trading
- Association, bottling, and wrapping operations of products to be exported
- Commercial as well as mercantile distribution of products manufactured to other jurisdictions
Puerto Rico’s tax incentives include several requirements and limitations. They are not a fast tax savings scheme. However, for people who are willing to live on the island, Puerto Rico taxes offer an amazing deal. Today, there are a number of companies that specialize in providing amazing benefits for Puerto Rico act 60 to help you save time and money. These experts assist individuals and small businesses in relocating to Puerto Rico. If you want to move to Puerto Rico, they are available to assist you. The primary aim is to enable and empower you to make an effective decision about whether Puerto Rico is right for you. If so, they will make it happen in a straightforward, reliable, and economical manner.
If you are looking for professional assistance, simply get in touch with a reliable service provider. Just go online and explore several experts in your region and find the right one.