Take advantage and apply for the aggressive multi-industry tax incentive package.
Puerto Rico is the largest exporter of biopharmaceuticals in the United States and the fifth largest pharmaceutical manufacturing territory in the world.
Taking advantage of Puerto Rico Tax Incentives may become the single most important decision and business opportunity during these uncertain times, toppled by global pandemia and possible government change.
Puerto Rico Tax Incentive Code, Act 60 of July 1, 2019, offers aggressive tax benefits to promote export sectors and many other industries including manufacturing, biopharma, construction, engineering, agriculture, legal, technology, advertising and healthcare.
The decree, if secured by December 31, 2020 may be deferred up to 5 years, while its incentives will begin at the commencement of operations or relocation to Puerto Rico.
Eligible services for the New Tax Incentives are ample including research and development; advertising and public relations, consulting, commercial arts and graphic design, professional services such as legal and taxes, electronic data processing centers, telecommunications, hospitals and labs, investment banking and other financial services.
Strategically located in the Caribbean and as a US jurisdiction, Puerto Rico is also the largest exporter of biopharmaceuticals in the United States and the fifth largest pharmaceutical territory in the world. The Island offers a multigenerational US trained and highly skilled workforce, while the Island’s competitive tax offerings can be complemented with federal tax programs, including opportunity zones.
Businesses providing services for exportation and other qualified industries are eligible for a 4% flat income tax rate on net income related to such activities when performed from Puerto Rico.
Distributions from earnings and profits derived from eligible activities are 100% tax exempt from Puerto Rico income taxes.
Eligible business receive a 50% exemption from municipal gross receipts taxes of up to 0.5% (1.5% for financial services).
Property used in eligible activities receives a 75% exemption from property taxes.
New residents get a 100% tax exemption from Puerto Rico income taxes on all dividend and interest income. Interest and dividends that qualify as Puerto Rico source income are not subject to federal income taxation under Section 933 of the U.S. Tax Code.
All capital gains accrued from eligible Investments after becoming a new resident are 100% exempt from Puerto Rico income taxes. Capital gains and other investment income sourced to Puerto Rico are not subject to federal income taxes.
Prior unrealized capital gains: Capital gains accrued prior to becoming a new resident and realized after moving to Puerto Rico may be subject to tax.
To qualify for the Act 60 incentives, all gains must be recognized prior to January 1, 2036.
About BDO in Puerto Rico
BDO in Puerto Rico is the largest locally owned accounting and advisory firm on the island led by 13 partners who are experts in their field, driven by about 130 employees and supported by BDO Global, the fifth largest accounting firm in the world with presence in more than 160 countries.
In recent years, BDO in Puerto Rico has assisted more than 500 businesses and individuals to take advantage of Puerto Rico's tax incentives as a key platform to expand and diversify their operations.
Contact us to explore these opportunities.