Puerto Rico Tax Incentives
Click on the Act number to discover its benefits
Act to Promote the Exportation of Services
Activity Incentivized: Services performed from Puerto Rico to the United States and other foreign markets.
Income Tax Benefit: 4% flat rate & 0% dividend taxation.
Property Tax and other Municipal Tax Exemptions: 60% exemption on municipal license tax & 90% exemption on property tax for certain activities.
Tax Credits: N/A
Relocation of individuals with investment portfolios
Activity Incentivized: Relocation of individuals with investment portfolios.
Income Tax Benefit: 0% rate on Puerto Rico sourced interest, dividend and after relocation capital gains. Prior relocation capital gains are taxed at preferential rates.
Property Tax and other Municipal Tax Exemptions: N/A
Tax Credits: N/A
Economic Incentives Act for the Development of Puerto Rico
Activity Incentivized: Manufacturing, R&D, Recycling, Software Development, Energy Generation from Renewable Sources and other.
Income Tax Benefit: 4% flat rate, 0% dividend taxation & 12% special withholding royalties rate to foreign persons not doing business in Puerto Rico.
Property Tax and other Municipal Tax Exemptions: 60% exemption on municipal license tax and property tax.
Tax Credits: Tax credits may be generated for job creation, purchase of P.R. manufactured products, and other activities.
Tourism Development Act
Activity Incentivized: Tourist Activities: hotels, time shares, casinos, amusement parks, marinas, medical tourism facilities, and other.
Income Tax Benefit: 90% exemption from income tax & 90% exemption on dividend tax to shareholders
Property Tax and other Municipal Tax Exemptions: 90% exemption on municipal license tax and property tax.
Tax Credits: Up to 40% of eligible investment may be granted as a credit to finance the project.
International Financial Center Regulatory Act
Activity Incentivized: New banking and financial activities in Puerto Rico for clients located outside of Puerto Rico.
Income Tax Benefit: 4% flat rate & 0% dividend rate to non-Puerto Rico residents, 6% to Puerto Rico residents.
Property Tax and other Municipal Tax Exemptions: 100% exemption on municipal license tax and property taxes.
Tax Credits: N/A
Real Estate Investment Trusts
Activity Incentivized: Promote the investment in Puerto Rico through Real Estate Investment Trusts (REITS)
Income Tax Benefit: 100% exemption for REIT, if it complies with requirements & 10% tax rate for shareholders distributions.
Property Tax and other Municipal Tax Exemptions: N/A
Tax Credits: N/A
Private Equity Funds Act
Activity Incentivized: Promote private investment in Puerto Rico through Private Equity Funds (PEF)
Income Tax Benefit: Investments are deductible (30%/60%) from income tax, 0%/2.5% capital gains (generated by PEF) tax & 5%/10% tax on interest and dividends to partners and investors
Property Tax and other Municipal Tax Exemptions: 100% exemption on municipal license tax and property taxes.
Tax Credits: N/A
Puerto Rico Film Industry Economic Incentives Act
Activity Incentivized: Promote film projects and other recorded work, and promote development of studios.
Income Tax Benefit: From 4% to 10% income tax rate & 0% rate for shareholder distributions.
Property Tax and other Municipal Tax Exemptions: 100% exemption on municipal license tax & 90% exemption on property taxes.
Tax Credits: From 40% to 90% investment credits may be generated.
International Insurance Centers
Activity Incentivized: Promote the development of international insurer entities in Puerto Rico for markets outside of Puerto Rico.
Income Tax Benefit: 4% flat rate after $1.2 million net income exclusion, 0% tax on shareholders distributions & 100% exemption on premium taxes.
Property Tax and other Municipal Tax Exemptions: 100% exemption on municipal license tax and property taxes.
Tax Credits: N/A