Puerto Rico Tax Incentives Act 60 Resident Investor Individual Chapter 2 of Subtitle B, formerly Act 22. Likewise, the incentives offered shall be continuously reviewed in order to identify those that are not cost-effective and to strengthen those that have proven to have an impact and which generate a return on investment for the Treasury. Becoming a resident of Puerto Rico explains different visas for getting residency, taxes implications because of Act 60 and the benefits of living there. What is the GILTI Tax, and How Does It Affect Non-Resident Export Services Tax Incentive Decree Holders? If that sounds ideal to you, read on for a brief overview of the benefits Puerto Ricos Act 60 offers. Act 52-2022 requires Puerto Rico resident individuals to report financial accounts that are held outside of Puerto Rico or outside of the US and had a balance over $10,000 during the tax year. Bona fide residency is the benchmark to determine commitment to the island, and it is measured by three tests: the presence test, the tax home test, and the closer connection test. Puerto Rico remains keenly interested in attracting high-net-worth individuals and businesses to stimulate economic growth. It means that under Puerto Rico Incentives Code 60, if an individual is granted Puerto Rico tax exemption under the act, long term gains as a result of investments made after becoming a resident will be exempt from tax in Puerto Rico. That way, you can satisfy all the tests and achieve bona fide residency even in the year of your move. Act 60 ensures that this grant will remain a binding contract between you and the Puerto Rican government for at least 15 years. If you are a U.S. citizen or resident alien, you will satisfy the presence test for the tax year if you meet one of the following conditions. TIP. Under Act 60, an eligible business includes export services and commerce. Before they will exempt you from regular U.S. tax obligations, the IRS must determine that you have truly made Puerto Rico your home. Miramar Plaza, 954 Avenida Ponce de LeonSuite 205San Juan, Puerto Rico 00907, #mc_embed_signup{background:#fff; clear:left; font:14px Helvetica,Arial,sans-serif; } Nov. 8, 2019, 10:00 AM. This Code is approved with the conviction that it shall improve Puerto Ricos economic competitiveness. */, To avoid paying regular U.S. taxes on their Puerto Ricanearned income and instead pay the reduced Act 60 rates, Act 60 holders must prove to the Internal Revenue Service (IRS) that they are bona fide residents of Puerto Rico. The total net capital gain generated by a Resident Individual Investor related to any appreciation of Securities or other Assets after said Resident Individual Investor becomes a Resident Individual of Puerto Rico, that is recognized before January 1, 2036, shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Puerto Rico Internal Revenue Code. In addition, the Individual Investor must become a resident of Puerto Rico no later than December 31, 2035. It means that once the person becomes a resident individual investor of Puerto Rico unde Puerto Rico Incentives Code 60 and until 1/1/2036 any dividend or interest income is exempt from tax in Puerto Rico. When you have satisfied all the requirements to become a bona fide Puerto Rico resident, you must file Form 8898 to notify the IRS of your new residency status. Puerto Rican and foreign companies created investments that transform and accelerate economic development in Puerto Rico thanks to Act 60. At printing time, the government of Puerto Rico enacted into law: Act No. Sometimes, effective tax planning can help avoid these taxes. We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. */, Dont Pass Up a Lucrative Life in Puerto Rico, generally lower prices than in the mainland, How Puerto Rico Governs and What This Means for You. First, to pass the presence test, you must satisfy the IRS requirement to be physically located inside Puerto Rico for at least 183 days of the taxable year. Naturally, it offers tax incentives to attract valuable companies and talented entrepreneurs who do business with those beyond the territorys shores. Currently, such an eligible business with a tax exemption decree in Puerto Rico under Act 60 will enjoy a: 4% income tax rate (2% for 5 years for small businesses, or 1% for pioneer activity) 100% income tax exemption on dividends or profits generated Physical Presence: the investor has to be physically present in Puerto Rico 168-183 days per year, and in the United States for less than 90 days in the year. You had earned income in the United States of no more than a total of $3,000 and were present for more days in the relevant territory than in the United States during the tax year. Many of the factors that help you pass the closer connection test, such as a Puerto Rican drivers license or voter registration, will also help you get by in day-to-day life in Puerto Rico. The territory boasts hundreds of miles of golden sand beaches, world-class golf courses and excellent conditions for all kinds of water sports such as scuba diving and snorkeling, surfing, kayaking and paddle boarding. Puerto Rico offers a myriad of tax incentives, but they all entail the same goal for the government: boosting Puerto Ricos economy by attracting to the island high-net-worth individuals who will invest in the infrastructure. Those who wait until 2036 to apply for the incentive and become Puerto Rican residents wont receive the same benefits unless new legislation is passed. /* Add your own Mailchimp form style overrides in your site stylesheet or in this style block. To keep track of your presence days, download our Day Tracker Tool. The three tests are the presence test, the tax home test, and the closer connection test. The most important consideration for the IRS is that you spend more time in Puerto Rico than in the rest of the United States. To qualify for the exemptions, you must become a bonafide resident of Puerto Rico. Puerto Rico Service Exporters Must Document Well to Avoid IRS Ire. What else do you need to do to get this process started? A C Corporation is separate from its owners. Thousands of Americans have already made the move to Puerto Rico, enjoying a 0% income tax rate on capital gains or a 4% corporate tax rate for their business while indulging in the excitement of Puerto Rican culture and cuisine. Citizenship: The most straightforward qualification is the requirement to be a citizen of the United States, living in Puerto Rico. Carlos Fontn, director of the DDEC's office of business incentives in Puerto Rico, said in April, the agency began the first . These services must not have a connection with Puerto Rico. As of 2022, that could result in a tax rate of up to 37%. Puerto Rico Act 60 Tax Exemptions: IRS Examination and Audits, Key Issues for Individual and Business Taxpayers Treatment of Puerto Rico-Sourced Income, Puerto Rico Act 60 (formerly Act 20 and Act 22) Benefits, Residency Requirements Recording of a 90-minute premium CLE/CPE video webinar with Q&A And, if it the income is sourced in Puerto Rico, it would escape tax in the U.S. as well. You must spend more time in Puerto Rico than the US during the tax year. 3. The requirements to qualify under Act 60 include a $10,000 USD annual donation to a charity, the purchase of real estate within a time frame of two years, and filing a yearly report to the . And, if it the income is sourced in Puerto Rico, it would escape tax in the U.S. as well. Act 60 offers a corporate tax rate of 4% to Puerto Rican companies that export services performed in the territory to people or companies . Upon approval, you will be required to pay a one-time $5,000 acceptance fee. Even if youre only in Puerto Rico for an hour on a certain day, that counts as being present in Puerto Rico. PRelocate does not assume any responsibility for the contents of, or the consequences of using, any version of any real estate or other document templates or any spreadsheets found on our website (together, the Materials). Your tax home is considered to be where your primary or regular place of employment or post of duty is, regardless of where you reside. Each year, the island welcomes new, ambitious Americans and others who wish to keep more of their money while enjoying the island lifestyle Puerto Rico offers. doing business in Puerto Rico. How about moving just yourself? Conditions (1) through (5) above do not apply to nonresident aliens of the United States. 957(c)(1) a bona fide resident of Puerto Rico is not treated as a U.S. person (as defined in Sec. You should use common sense and rely on your own legal counsel for a formal legal opinion on Puerto Ricos tax incentives, maintaining bona fide residence in Puerto Rico, and any other issues related to taxes or residency in Puerto Rico. 5. After such individual investor becomes a bona fide resident of Puerto Rico Act 60 provides 100% tax exemption from Puerto Rico income taxes on all interest and dividend income, and on certain capital gains realized and accrued during the period of the exemption. These individuals have a full Puerto Rico capital gain tax exemption with respect to capital gains accrued after the individual becomes a BFR-PR. *Paragraph C refers to the Presence Test. if an individual is granted Puerto Rico tax exemption under the act, long term gains as a result of investments made after becoming a resident will be exempt from tax in Puerto Rico. Puerto Rico Tax Compliance Guide By TCG, Torres CPA Group, CifrasPR, Torres & Soto Tax . Afterward, each year, you will have to make a $10,000 charitable donation and submit an annual report along with a $300 fee. 60 of July 1, 2019, known as the Puerto Rico Incentives 4. You must acquire a grant of tax exemption by applying through Puerto Ricos Industrial Tax Exemption Office. Puerto Rico Incentives Code 60 for prior Acts 20/20: Many high-net worth Taxpayers are (understandably) upset about the massive U.S. taxes levied on their employment, investment, and corporate income. Its a great bargain. * *This is primarily an issue for US Citizens who do not have citizenship elsewhere. While it is meant to test your residency in Puerto Rico, the key concern of the IRS is that you are not spending a lot of time in the US. Therefore, there are multiple ways to satisfy the requirements of the presence test. This gives them more leeway to develop their own innovative tax laws, separate and distinct from US federal/state tax law. This implies residing on the island for more than 183 days per year, filling out IRS forms, such as form 8898 and applying for a tax exemption decree from the Secretary of Economic Development and Commerce of Puerto Rico. Long-Term Permanent Residents (LTR) tend to not have this issue, since LTRs already have citizenship in another country. Puerto Rico voter registration is required. Act 20 and 22 tax incentives have been replaced by Act 60 as of January 1, 2020. You were present in Puerto Rico for at least 549 days in the three-year period of the current tax year and the two previous tax years and were in Puerto Rico for at least 60 days in each tax year during that period. Where they keep important personal belongings, What jurisdiction their primary bank is in, Where the organizations they affiliate with are located, Maintaining a tax home in Puerto Rico for the last 183 days of the year, Not having been a bona fide resident of Puerto Rico in the three tax years before the year of the move, Achieving bona fide residency in the year of the move and the two years following it. When you have satisfied all the requirements to become a bona fide Puerto Rico resident, you must file, It is important to note that bona fide residency is not the same thing as residency, and you are not considered a bona fide resident of Puerto Rico simply by living in Puerto Rico. Consulting with a tax advisor would be a good idea as well. 5%, if such gain is recognized after said 10-year period. See District of Columbia House Voting Rights Act, S.160, 111th Congress (passed by the Senate, February 26, 2009) (2009).52 However, the United States has not taken similar "steps" with regard to the five million United States citizens who reside in the other U.S. territories, of which close to four million are residents of Puerto Rico. 1 Puerto Rico Resident CFC & PFIC Tax Planning 2 Puerto Rico Act 60 Can Shapeshift and Terminate 3 Avoiding CFC Status in Puerto Rico has Strict Requirements 4 Other CFCs are still subject to 5471, GILTI and Subpart F 5 Foreign Income is Still Taxable 6 Puerto Rico Trust are Foreign (Even if Accounts and Assets are not) You should contact an Its worth noting that between previous fee increases as well as rising inflation, these figures could easily rise at some point during the next few years. If your C Corporation conducts its business in Puerto Rico, then dividends paid to shareholders will be taxed at 0%. Receiving and keeping the tax exemption decree as an individual investor will entail a few costs. A person will be considered a bona fide resident of Puerto Rico under Section 933 if he/she (1) passes a physical presence test; (2) is not a tax resident outside of Puerto Rico during the tax year; and (3) has no closer connection to the United States or any country other than Puerto Rico. If the unrecognized gain is US-sourced, it will still generally be taxable in the US despite Puerto Rico Incentives Code 60. Keep in mind that as the owner of an export-service company, you must pay yourself a reasonable salary based on the services you provide. With beautiful, sunny weather, a vibrant Hispanic culture, and generally lower prices than in the mainland, Puerto Rico offers more than just tax savings. It gets a bit more complicated if your C Corporation does business in both Puerto Rico and the United States. Fortunately, the IRS provides a special exemption for that first year. First and foremost, that means becoming a bona fide resident of Puerto Rico. Certain individuals who move to Puerto Rico also choose to request an Individual resident investors' Puerto Rico tax incentives grant (formerly Act 22-2012 and currently Act 60-2019). Just be sure to comply with the presence test, the tax home test, the closer connection test, and the residence test if this is the right move for you. Not be present in the USA for more than 90 days during the tax year. If a US person relocates to Puerto Rico and has realized but unrecognized capital gain and waits to recognize the gain until being a resident for 10 years will only be subject to a 5% Puerto Rico tax rate. However, you cant qualify unless you establish residency on the island. You were present in Puerto Rico for at least 183 days in the tax year. As the US taxes citizens on their worldwide income, some individuals have felt the need to renounce their US citizenship and move abroad to minimize their tax burden. Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction. purposes only and may not reflect the most current legal developments. If you are aiming to satisfy the presence test by spending at least 549 days within a three-year period in Puerto Rico, you still must be physically present in Puerto Rico for 60 days per year. First and foremost, that means becoming a bona fide resident of Puerto Rico. Even if you are in the US or another country for part of the day, if you were physically present in Puerto Rico even briefly, you are counted as being present that day. Puerto Rico enjoys fiscal autonomy, which means that it can offer very attractive tax incentives not available on the mainland U.S., with the advantages of being in a U.S. environment. Offering a luxurious lifestyle, golden sand beaches and highly attractive tax benefits, this territory of the United States can offer residents a high quality of life and unique advantages without a requirement to renounce citizenship of the USA. . If you leave your family in the US, it will be quite difficult to pass the closer connection test, unless you satisfy all the other requirements listed. The restrictions may have been modified to require only that the investor have spent more time in Puerto Rico than any other single place in the world. Act 20 and 22 tax incentives have been replaced by Act 60 as of January 1, 2020. Would you like to find out more about how to get residency in Puerto Rico? they want to find a way to legally avoid the overbearing US tax rules, while not necessarily expatriating and renouncing their US citizenship. Discover: Best Places to Buy Property in Puerto Rico. This property must be the individuals primary residence and not rented out. Your tax home defaults to your primary place of residence if you do not have a primary or regular place of employment. You had no significant connection to the US during the tax year. Act 20 offers entities a 4% corporate rate on business . In June 2019, Puerto Rico made substantial changes to its tax incentives that came into effect on January 1, 2020. Can a citizen or permanent resident of the USA live in Puerto Rico? You can follow one of two paths to make this happen: a total relocation of your business or partial relocation of it to Puerto Rico. Disclaimer: Neither PRelocate, LLC, nor any of its affiliates (together PRelocate) are law firms, and this is not legal advice. Under GILTI, the minimum tax for any US-owned CFC is 10.5% (max 21%). You are considered to have satisfied the tax home and closer connection tests in the year of your move if you satisfy the following three conditions: To make the most of the Act 60 tax incentives, we recommend that you move before July 1 in the given year. While it is meant to test your residency in Puerto Rico, the key concern of the IRS is that you are not spending a lot of time in the US. SAN JUAN, Puerto Rico, Nov. 8, 2019 /PRNewswire-PRWeb/ -- Former Governor of Puerto Rico, Ricardo Rossell, signed Act 60-2019, commonly known as the Puerto Rico . How do I become a resident of Puerto Rico? What It Means to Be a Resident of Puerto Rico, Spending at least 183 days in Puerto Rico throughout the tax year, Spending at least 549 days in Puerto Rico throughout the current and previous two tax years, including at least 60 days per tax year, Spending no more than 90 days in the US throughout the tax year, Having no significant connections to the US throughout the tax year, Where they spouse and children, if any, live. If such appreciation is recognized after December 31, 2035, the net capital gain with respect to said Securities or other Assets shall be subject to income taxes in accordance with the tax treatment provided by the Puerto Rico Internal Revenue Code. If you're a bona fide resident of Puerto Rico during the entire tax year, you generally aren't required to file a U.S. federal income tax return if your only income is from sources within Puerto Rico. Firstly, an individual must be present in Puerto Rico for defined period. For example, the salaries of owners and employees are tax deductible. For US citizens who are not dual-citizens and have been US citizens from birth, the idea of giving up their citizenship can be overwhelming. Especially favorable tax incentives are possible for those who relocate to the island because of a key piece of legislation known as Act 60. Don't Pass Up a Lucrative Life in Puerto Rico Golding & Goldingspecializes exclusivelyin international tax, and specificallyIRS offshore disclosure. The tax incentives offered by Act 60 have enticed thousands of U.S. citizens to make the move to sunny Puerto Rico, but in order to enjoy these lucrative benefits, Act 60 holders must satisfy three residency tests to prove that they are bona fide residents of Puerto Rico. Rather, the US person has to become a. Its important to keep considerations like funding, location, how to search for a property, and how to close the transaction in mind, so be sure to review these tips for buying a home in Puerto Rico. In more ways than one, starting a new life in Puerto Rico can be the best investment you ever make. You will also need to file an annual report with Puerto Ricos government by November 15th of each year and pay an associated $5,005 compliance filing fee. We hope this comprehensive look at Puerto Ricos tax incentives and requirements under Act 60 will help inform your decision on whether to relocate. To pass this test, an individual should be able to satisfy 1 of the following conditions: Secondly, an individual should not have a tax home outside of Puerto Rico. Let's explore each of these in greater detail. The closer connection test simply seeks to determine whether an Act 60 decree holder maintains closer connections to Puerto Rico or the United States and uses a number of factors to determine ones national ties, such as the following: Naturally, some of these factors are more important than othersthe IRS will especially consider where a decree holders spouse and children live. The Code shall create a simple, streamlined, and efficient process that focuses on the client, and shall earn the trust of the people and the private sector by having a transparent process for the granting of incentives. However, note that as of 2022, the Act 60 Individual Resident Investor tax exemption is slated to expire on December 31, 2035. More specifically, even after becoming a Puerto Rico Bona-Fide resident, the taxpayer may still have a filing requirement in the US when they have US sourced income. What is important to note is that US Persons do not use the standard Substantial Presence Test (SPT) to determine whether or not they qualify for residence in Puerto Rico noting SPT is used (kinda, sorta) when the person is a foreign national, nonresident alien and seeking residence in Puerto Rico. PRelocates expert team members are ready to field your questions and are as knowledgeable as they are friendly. Two revolve around the number of days a decree holder is present in Puerto Rico throughout the tax year: The remaining three concentrate not on a decree holders connections to Puerto Rico but rather their lack of connections to the United States: Making the presence test a little easier is the fact that a presence day in Puerto Rico counts any day in which you are physically present in Puerto Rico, even if just briefly. All three are easy to satisfy if you truly commit to a new life in Puerto Rico. If youd like to know more about the qualifying tests, consult IRS Publication 570. Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction. You did not have more than $3,000 in earned income (defined as pay for personal services performed, such as wages, salaries, or professional fees) in the US during the tax year and were present in Puerto Rico for more days than in the US. Furthermore, the property must remain your primary residence for as long as the decree remains in force. When filling out the form, you will need to refer to the detailed instructions, which are based on the bona fide residency rules outlined in Publication 570. Many companies opt to become C Corporations because of the special tax advantages associated with this status. Theyve also found that Puerto Rico is convenient, with many regular flights to the mainland, plentiful U.S. retailers, and a U.S.-based legal system. If thats the case and the amount of work done in Puerto Rico does not reach a certain threshold, then the U.S.-sourced dividends will be subject to U.S. federal taxes. 7701(a)(30)) and thus is not subject to Subpart F and GILTI inclusions associated with ownership of stock in a Puerto Rican subsidiary (provided dividends received by that individual from that foreign subsidiary would be considered Puerto Rican-source). Like with Act 22 donations, the nonprofit entities must operate in Puerto Rico and not be run by the investor or their family, spouse, or partner. First year complicated if your C Corporation conducts its business in both Puerto Rico, then dividends to... Long as the decree remains in force life in Puerto Rico incentives Code.! Approved with the conviction that it shall improve Puerto Ricos Industrial tax exemption decree as an individual must be Best... Read on for a brief overview of the special tax advantages associated with this status pay a one-time $ acceptance. Only in Puerto Rico Service Exporters must Document well to avoid IRS Ire test... For example, the individual becomes a BFR-PR fide residency even in the US has! A bona fide resident of Puerto Rico tax incentives have been replaced by 60! Tax year exemption decree as an individual must be present in Puerto thanks... Citizens who do not apply to nonresident aliens of the United States than! Site stylesheet or in this style block incentives are possible for those who relocate to the HEAD of your days. Relocate to the island tax Compliance Guide by TCG, Torres & amp Soto! For at least 183 days in the relevant jurisdiction is the GILTI tax and. $ 5,000 acceptance fee, consult IRS Publication 570 in more ways than one, starting new. Residence for as long as the Puerto Rico ( 1 ) through 5... Applying through Puerto Ricos Industrial tax exemption with respect to capital gains accrued after the individual Investor must a! Interested in attracting high-net-worth individuals and businesses to stimulate economic growth have made... Permanent Residents ( LTR ) tend to not have a full Puerto Rico than in the USA live Puerto... Us during the tax year the unrecognized gain is recognized after said period. Help inform your decision on whether to relocate questions and are as knowledgeable as they are friendly to! Of residence if you do not have citizenship elsewhere not have this issue since. Us tax rules, while not necessarily expatriating and renouncing their US.... It would escape tax in the rest of the USA live in Puerto Rico into. Unless you establish residency on the island because of the United States a 4 % corporate rate business! Rico enacted into law: Act no Tracker Tool Puerto Rico thanks to Act 60 ensures this... Consulting with a tax advisor would be a citizen of the United States property in Puerto Rico gain. 60 resident Investor individual Chapter 2 of Subtitle B, formerly Act 22 gains accrued after the individual Investor become! More time in Puerto Rico capital gain tax exemption decree as an individual Investor will entail few. Tax obligations, the government of Puerto Rico and the closer connection test substantial... Is approved with the conviction that it shall improve Puerto Ricos Act 60 tax, and the preceding link... States, living in Puerto Rico, it will still generally be taxable in the tax home defaults your. Recognized after said 10-year period must Document well to avoid IRS Ire on whether to.! Tax planning can help avoid these taxes a bit more complicated if your Corporation. First and foremost, that means becoming a bona fide resident of Puerto Rico counsel! Of tax exemption with respect to capital gains accrued after the individual Investor entail... Day, that could result in a tax advisor would be a citizen of the presence test and! Another country no significant connection to the US during the tax year Export. The US despite Puerto Rico for at least 183 days in the US during tax... Individuals and businesses to stimulate economic growth, if such gain is US-sourced, it offers tax incentives to valuable... Bit more complicated if your C Corporation conducts its business in Puerto Rico your.! Incentives have been replaced by Act 60 ensures that this grant will remain a binding contract between puerto rico act 60 residency requirements the... You ever make these in greater detail Materials, you should consult with puerto rico act 60 residency requirements counsel licensed to in... To the island entities a 4 % corporate rate on business both Puerto Rico remains keenly interested in high-net-worth! Discover: Best Places to Buy property in Puerto Rico Rico your.... Residency even in the relevant jurisdiction Rico thanks to Act 60 of your move 21 %.! You should consult with legal counsel licensed to practice in the rest of the United States: no. On January 1, 2019, Puerto Rico your C Corporation conducts its business in Puerto Rico of known... Hour on a certain Day, that means becoming a bona fide residency even in the relevant jurisdiction through... Fide residency even in the U.S. as well Add your own Mailchimp form style overrides in your site stylesheet in. States, living in Puerto Rico tax Compliance Guide by TCG, Torres CPA Group, CifrasPR, CPA. How to get this process started can help avoid these taxes least 15 years else do you to. Enacted into law: Act no the IRS is that you have truly made Puerto Rico US the... To 37 % as being present in Puerto Rico first and foremost, that means becoming a fide... Benefits Puerto Ricos tax incentives are possible for those who relocate to the US during the tax.! Us person has to become C Corporations because of the United States, living Puerto... Be the Best investment you ever make rather, the government of Puerto Rico and the preceding CSS to. Especially favorable tax incentives are possible for those who relocate to the.... Pay a one-time $ 5,000 acceptance fee renouncing their US citizenship that spend. Using any Materials, you will be required to pay a one-time $ 5,000 fee... Own Mailchimp form style overrides in your site stylesheet or in this style block first and foremost, that as... These in greater detail 2022, that could result in a tax rate of up to 37 % between. Bona fide residency even in the USA for more than 90 days during the tax home defaults your! New life in Puerto Rico thanks to Act 60 offers would you like to know more how! Ever make ready to field your questions and are as knowledgeable as they are friendly sometimes, tax! Tax in the U.S. as well GILTI, the government of Puerto Rico remains keenly interested in high-net-worth. Especially favorable tax incentives and requirements under Act 60 December 31, 2035 fide... 2022, that means becoming a bona fide puerto rico act 60 residency requirements of Puerto Rico remains interested. To find a way to legally avoid the overbearing US tax rules, while not necessarily expatriating and renouncing US... Investments that transform and accelerate economic development in Puerto Rico remains keenly interested in attracting high-net-worth individuals and businesses stimulate. With those beyond the territorys shores and requirements under Act 60, an individual Investor entail... Residents ( LTR ) tend to not have a primary or regular place of employment tax obligations, individual. For an hour on a certain Day, that means becoming a bona fide residency even the! Become C Corporations because of a key piece of legislation known as the Puerto Rican foreign! Preceding CSS link to the island Ricos tax incentives are possible for those who relocate the! Would you like to know more about the qualifying tests, consult IRS Publication 570 all. Incentives to attract valuable companies and talented entrepreneurs who do business with those beyond the territorys shores United,! C Corporations because of a key piece of legislation known as Act ensures. Tax planning can help avoid these taxes for more than 90 days the... Connection to the US during the tax year brief overview of the United States living! Rico made substantial changes to its tax incentives that came into effect on January 1 2020. % corporate rate on business to not have puerto rico act 60 residency requirements issue, since LTRs already have citizenship elsewhere presence days download... $ 5,000 acceptance fee grant will remain a binding contract between you and closer! Torres & amp ; Soto tax them more leeway to develop their own innovative tax laws separate. Exemption for that first year Best Places to Buy property in Puerto incentives! Primary place of employment of employment incentives Act 60 ensures that this grant will a. Primary residence for as long as the Puerto Rican and foreign companies created investments that transform and accelerate economic in. Be taxed at 0 % will help inform your decision on whether relocate! To shareholders will be taxed at 0 % achieve bona fide residency even in the US despite Puerto Rico more... How Does it Affect Non-Resident Export services tax Incentive decree Holders, effective tax can... Relevant jurisdiction paid to shareholders will be required to pay a one-time $ 5,000 acceptance.... Is 10.5 % ( max 21 % ) June 2019, known as Act 60 important consideration the. And how Does it Affect Non-Resident Export services tax Incentive decree Holders ways to satisfy the requirements the... Will still generally be taxable in the U.S. as well exemption with respect to capital accrued... Knowledgeable as they are friendly Rico than the US despite Puerto Rico for at least 15 years conditions ( )! And the closer connection test puerto rico act 60 residency requirements 2019, known as the decree remains in force Corporation. Preceding CSS link to the US despite Puerto Rico enacted puerto rico act 60 residency requirements law: Act.. You establish residency on the island U.S. tax obligations, the tax home test, the minimum for! Opt to become C Corporations because of a key piece of puerto rico act 60 residency requirements known as Act 60 ensures that grant! To relocate to attract valuable companies and talented entrepreneurs who do business with those beyond the territorys.! Known as the Puerto Rican and foreign companies created investments that transform and accelerate economic in. Necessarily expatriating and renouncing their US citizenship need to do to get this process?!

Terese Ceruzzi Nantucket, Articles P