About Act 60 (Formally Act 22)

Act 60 - Individual Investors Act (Previously Act 22)

Tax Benefits for Individual Investors:

1. 0% Tax on Dividends and Interest: Qualifying individuals enjoy a 0% Puerto Rican tax rate on dividends and interest income.
2. 0% Tax on Capital Gains: This includes a 0% tax rate on capital gains accrued after moving to Puerto Rico.
   • For gains accrued before moving but realized after moving, there might be different rates applied, depending on when the gains are realized.

Eligibility:

• Individuals must not have been residents of Puerto Rico within the 15 years prior to the enactment of the Act.
• They must become a resident of Puerto Rico and spend a minimum of 183 days per year on the island.

Other Requirements:

• A charitable donation requirement is typically involved, mandating annual contributions to approved Puerto Rican charities.

Tax Benefits for Businesses:

1. 4% Corporate Tax Rate: A highly favorable tax rate for eligible businesses.
2. 100% Tax Exemption on Dividends: From earnings and profits derived from the export services.
3. Property Tax Incentives: Potential exemptions or reductions in property taxes for businesses engaged in export services.

Eligible Businesses:

• This includes a wide range of services like consulting, investment management, and technology services, provided these services are offered to clients outside of Puerto Rico.

Requirements:

• Businesses must maintain an office or establishment in Puerto Rico.
• There are also requirements regarding the number of employees.

1. Application Process: Involves submitting an application to the appropriate Puerto Rican government agency and obtaining a tax exemption decree.
2. Compliance: Beneficiaries of Act 60 must comply with all the requirements, including residency and business operations, and are subject to audits.
3. Economic Impact: These acts are designed to stimulate the Puerto Rican economy by attracting new residents and businesses.

• It's important to note that tax laws and regulations can change, and there may have been updates or amendments to Act 60 after my last training data in April 2023.
• Consulting with a tax professional or legal advisor who specializes in Puerto Rican tax law is crucial for the latest information and personalized advice.

Act 60 offers attractive tax benefits for both individuals and businesses. However, it requires careful consideration of the eligibility criteria, compliance requirements, and long-term commitments. These incentives are part of Puerto Rico's strategy to revitalize its economy by attracting investment and talent to the island.