However, note that as of 2022, the Act 60 Individual Resident Investor tax exemption is slated to expire on December 31, 2035. Foreign Earned Income Exclusion: 0% tax on first $100,000 and 35% tax on $400,000 = $140,000. These benefits are available to any Act 60 Individual Resident Investor decree holder who fulfills the requirements for bona fide residency in Puerto Rico, pay the applicable filing fees, meets the minimum annual charitable donations (currently $10 annual to approved PR registered non-profit), and lives on the island at least 3 years. The purpose of Puerto Rico Incentives Code 60 is to promote investment in Puerto Rico by providing investment residents with tax breaks. Consulting companies, auditing firms, marketing businesses, and more are eligible business types. TIP. Under Act 60, an eligible business includes export services and commerce. /* Add your own Mailchimp form style overrides in your site stylesheet or in this style block. Don't Pass Up a Lucrative Life in Puerto Rico Schedule Consultation . If youve invested in stocks, securities, or cryptocurrency, this may still be a great move for you. 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. Have no significant connection to the USA during the tax year. 5%, if such gain is recognized after said 10-year period. What are Puerto Rico Tax Incentives Under New Act 60 (20/22). These free travel days encompass travel outside of the United States but effectively mean that a degree holder need only spend 153 days in Puerto Rico, as long as the extra 30 days are spent outside of the US. Physical . Lets clarify what we mean when we say these tax breaks apply only to exported services. Noting, the Puerto Rico BFR rules are not the same as the Substantial Presence Test BFR rules but the concept is the same. Residency in Puerto Rico The Guide from 7th Heaven Properties, Can a citizen or permanent resident of the USA live in Puerto Rico? PUERTO RICO 787.759.9292 MIAMI 305-677-6626 MCVPR.COM . 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. Puerto Ricos status as a top tax haven is undisputed. The factors that the IRS considers when determining whether you have maintained a closer connection to Puerto Rico than the US during the tax year include the following: Essentially, to pass the closer connection test, you need to move your entire life to Puerto Rico, including your family. And, if it the income is sourced in Puerto Rico, it would escape tax in the U.S. as well. Puerto Rico Residency Requirements Benefits of Puerto Rico Residency Find Out More. Flights to and from Puerto Rico are considered domestic flights, a distinction shared in the Caribbean by only one other island chain: the US Virgin Islands. 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. . Planning Tip: Puerto Rico income is not taxable in the US but the US still taxes the individual on their worldwide income (other than Puerto Rico Income under IRC 933). 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. Furthermore, the property must remain your primary residence for as long as the decree remains in force. Those of Act 22 on average pay 12 times more than most taxpayers in PR. Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction. The three tests are the presence test, the tax home test, and the closer connection test. You dont need to satisfy them allsatisfying just a single one is sufficient. Executed lease or transfer of title-proof of real estate ownership is required. Legally avoiding the 37% federal rate and the 13.3% California (or other state) rate is a jaw-dropping benefit . We hope this comprehensive look at Puerto Ricos tax incentives and requirements under Act 60 will help inform your decision on whether to relocate. In order to encourage the transfer of such individuals to . And, if it the income is sourced in Puerto Rico, it would escape tax in the U.S. as well. Promotion of Puerto Rico as a residency jurisdiction Prevalence of non-resident options via IFEs (discussed below) 1. If your export-service company is conducting its activities inside Puerto Rico, it may be eligible for substantial benefits that apply to income received from customers outside of Puerto Rico. Puerto Rico seeks to move away from its historical focus on manufacturing and become a major services exporter. It is important to understand what is excluded for tax purposes and what is not excluded under, It is crucial to understand that in order to exclude the income from capital gains and dividends, it should be accrued. And since its generous tax incentives are only available to bona fide residents, enjoying the wonders of a Puerto Rican life is imperative. 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. Chapter 3 of Act 60-2019 - Export Services Tax Incentive. Special rule for nonresident aliens. Still, Puerto Rico hopes to lure American mainlanders with an income tax of only 4%. As of 2022, that could result in a tax rate of up to 37%. Basically, to satisfy the tax home test, keep your officeor your home, as the case may bein Puerto Rico. 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. Contrary to popular belief, just getting a Golden Visa without further action does not reduce an Americans tax liability. Additional small fees may apply. If you evacuate or cannot return to Puerto Rico due to disaster, you may also qualify for automatic presence days even though you are physically outside of Puerto Rico. In addition, every year you must make a donation of $10,000 split evenly between two qualifying nonprofit organizations in Puerto Rico. Before using any Materials, you should consult with legal counsel licensed to practice in the relevant jurisdiction. We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. Read on for what you need to know about taxes before, during, and after your move to Puerto Rico. In more ways than one, starting a new life in Puerto Rico can be the best investment you ever make. *This is primarily an issue for US Citizens who do not have citizenship elsewhere. The presence test considers how much time you spend in Puerto Rico. Think about how your business can flourish with such a low tax burden. Therefore, there are multiple ways to satisfy the requirements of the presence test. With beautiful, sunny weather, a vibrant Hispanic culture, and generally lower prices than in the mainland, Puerto Rico offers more than just tax savings. 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. Entrepreneurs can save with a 4% corporate tax rate. 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. You must acquire a grant of tax exemption by applying through Puerto Ricos Industrial Tax Exemption Office. Only, For detailed information directly from the IRS about the residency tests, consult, Educators and Trainers Can See Big Tax Breaks in Puerto Rico Under Act 60, Puerto Rico Tax Incentives: Young Entrepreneurs, A Guide to Puerto Rico Export Services Tax Incentive For Businesses, A Guide to Puerto Rico Investor Resident Individual Tax Incentive, How to Pass the Puerto Rico Bona Fide Residency Tests, Things to Consider Before Living in Puerto Rico, Are Puerto Ricans US Citizens? and representation are limited. However, this is a rule of thumb, and others have retained their status with fewer than 183 days on the islands soil in the wake of major natural disaster declarations. Long-Term Permanent Residents (LTR) tend to not have this issue, since LTRs already have citizenship in another country. Thanks to this code, your income sourced from Puerto Rico can be exempt from both federal and state taxes. Then, youll be required to file an annual report each year along with a $300 fee. Under certain conditions, you can also satisfy the presence test if you were located in Puerto Rico for at least 549 days during the current year and the preceding two years. they want to find a way to legally avoid the overbearing US tax rules, while not necessarily expatriating and renouncing their US citizenship. This tax haven can easily save taxpayers hundreds of thousands of dollars per year (or more) in federal taxes! The closer connection test is perhaps the most reliable in determining your loyalty to Puerto Rico. You are a bona fide resident of Puerto Rico for the year of your move plus the two proceeding years. Before they will exempt you from regular U.S. tax obligations, the IRS must determine that you have truly made Puerto Rico your home. Lets get some clarity on how the tax situation plays out: To begin with, becoming a resident of Puerto Rico is not as simple as purchasing a property and visiting the PR Coast a few times a year. The individual cannot have been a resident of Puerto Rico for at least 10 years prior this is increased from previously in which it was six years. To explore your options in more detail, please contact 7th Heaven Properties, the Luxury Caribbean Property Specialist. The purpose of Puerto Rico Incentives Code 60 is to promote investment in Puerto Rico by providing investment residents with tax breaks. 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. For all of the Puerto Rico tax incentives, it is necessary to ensure you understand and monitor compliance with residency requirements. A Puerto Rican driver's license is required. Spend at least 549 days in Puerto Rico during the 3-year period of the current tax year and the 2 preceding years, including at least 60 days in Puerto Rico during each tax year. Your chances of passing improve considerably as you strengthen banking, social, cultural, or religious ties to the island, identify Puerto Rico as your place of residence, and establish your permanent home there. We elaborate on that at the end of the post. You were not present in the US for more than 90 days during the tax year. If you have decided to make the move and take advantage of Puerto Ricos generous tax incentives, make sure youre really committed. The income derived from all sources by a Resident Individual Investor after becoming a resident of Puerto Rico but before January 1, 2036, consisting of interest and dividends including but not limited to interest and dividends from a registered investment company described in Section 1112.01 of the Puerto Rico Internal Revenue Code, shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Puerto Rico Internal Revenue Code. The most important consideration for the IRS is that you spend more time in Puerto Rico than in the rest of the United States. Then, once becoming a bona fide resident of Puerto Rico, the taxpayer will then begin to acquire income sourced from Puerto Rico so that it is not taxable in the United States. Its no surprise that thousands of Americans who have moved to the island have been thrilled with the tax breaks that have saved them millions of dollars. To qualify as a resident of Puerto Rico, an individual must essentially pass 3 key tests as follows. You'll become a bona fide resident and be eligible for Act 60 tax benefits if you pass four qualifying tests: the presence test, the tax home test, the closer connection test, and the residence test. If youd like to enjoy these much lower federal and state taxes, you must follow through on a series of Act 60 Puerto Rico requirements. Can a citizen or permanent resident of the USA live in Puerto Rico? For taxable years after December 31, 2016, said capital gain shall be considered income from sources outside of Puerto Rico for purposes of the income tax provided in the Puerto Rico Internal Revenue Code. Feb. 9, 2023, 1:45 AM. . Act 20 and 22 tax incentives have been replaced by Act 60 as of January 1, 2020. With the Act 60 Export Services Tax Incentive (formerly Act 20), it may only have to pay 4% corporate income tax. Various factors such as the presence of an individuals permanent home, family, belongings, principal bank and business in Puerto Rico, as well as the existence of professional, cultural, religious, social and political affiliations and links in Puerto Rico, may help to demonstrate a closer connection to Puerto Rico than to anywhere else. permanent residence, Puerto Rico, Real Estate, residency, Caribbean Citizenship by Investment Real Estate. 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. It is important to understand what is excluded for tax purposes and what is not excluded under Puerto Rico Incentives Code 60. Third, to pass the closer connection test, you must convince the IRS that you have stronger ties to Puerto Rico than to the rest of the United States. Due to the territorys legal status, moving to Puerto Rico is considered internal migration as opposed to immigration. Selling or renting out your home in the US is also a good idea, as not having a home readily available in the US will certainly boost your standing in the assessment of a closer connection. 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. Note, however, that if youre going for the 549 days in a three-year period condition, you must still physically spend at least 60 days in Puerto Rico each year. Under GILTI, the minimum tax for any US-owned CFC is 10.5% (max 21%). The U.S. will not tax any prior unrealized gains if recognized after 10 years of residence in Puerto Rico. Puerto Rican and foreign companies created investments that transform and accelerate economic development in Puerto Rico thanks to Act 60. We recommend moving this block and the preceding CSS link to the HEAD of your HTML file. To establish residence under the Act, someone must create a presumptive residence in Puerto Rico, live there for at least 183 days of the year, and cannot have a home outside Puerto. If your company provides services connected to commercial activities on the island or gives advice regarding the laws and regulations of Puerto Rico, it is not providing export services, because there is a connection. Puerto Rico is a great investment opportunity, because it does not require a passport for US citizens and it does not require the US citizen to expatriate in order to gain the tax benefits under Acts 20 and 22 (combined into Act 60) but, is it really that easy? attorney to discuss your specific facts and circumstances and to obtain advice on specific legal problems. */, Export Services Tax Incentive For Businesses, 100% tax exemption on distributions from earnings and profits, 75% tax exemption on municipal and state property taxes (small and medium businesses can receive a 100% exemption during their first five years of operation), To qualify, the business model must be concentrated around exporting services outside of Puerto Rico. 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. However, if you also have income from sources outside of Puerto Rico, including from U.S. sources, you're required to file a U.S. federal income tax return if such amount is above the U.S. filing . Individual - Residence. The core motivation of the IRS in administering the, The first of the three tests is perhaps the most complicated. 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. 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. Only one of the following conditions must be true: To be counted as present in Puerto Rico, you must be physically present on the island during any part of the day. When a US person obtains a Golden Visa, they have a second passport (CBI) or travel privileges (RBI). Youll become a bona fide resident and be eligible for Act 60 tax benefits if you pass four qualifying tests: the presence test, the tax home test, the closer connection test, and the residence test. All three are easy to satisfy if you truly commit to a new life in Puerto Rico. Disclaimer: Neither PRelocate, LLC, nor any of its affiliates (together PRelocate) are law firms, and this is not legal advice. Your benefits should not be affected even if there are amendments to the legislation during the term of this agreement. Even if youre only in Puerto Rico for an hour on a certain day, that counts as being present in Puerto Rico. Golding & Goldingspecializes exclusivelyin international tax, and specificallyIRS offshore disclosure. Thus, in the most ideal of situations, the taxpayer will move to Puerto Rico and become a Bona-Fide resident without having realized but unrecognized gain already. 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. 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. As a US territory, Puerto Rico has a unique tax climate. However, you cant qualify unless you establish residency on the island. These will be especially important to present if the IRS or Puerto Rico Department of Treasury (Hacienda) challenges your bona fide resident claims. According to Act 60-2019 (known as the "Puerto Rico Incentives Code") which replaces various historical incentives including Acts 20 and 22, residents of Puerto Rico can enjoy a 4% flat income tax rate and freedom from taxes on capital gains, dividends, interest and royalties. 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. Passing Puerto Ricos bona fide residency tests may seem tough, but if you truly move your whole life to Puerto Rico, its not that difficult. Passing the Presence Test One of these is the low 4% corporate tax rate we touched on earlier. Incumbent will receive assignments in the form of plans and specification covering work to be accomplished by contractors and schedules for completion of the construction work.Qualifications: Who . *Paragraph C refers to the Presence Test. To qualify for the exemptions, you must become a bonafide resident of Puerto Rico. If the unrecognized gain is US-sourced, it will still generally be taxable in the US despite Puerto Rico Incentives Code 60. The non-profit charitable contribution requirement which was previously at $5,000 has been increased to $10,000. Citizens and permanent residents of the USA enjoy the right to live in Puerto Rico in the same way that citizens of Puerto Rico may live in the mainland US. The term 'resident individual' means an individual who is domiciled in Puerto Rico. Where your personal belongings, such as cars, furniture, clothing, and jewelry, are stored, Where organizations that you affiliate with, whether professional, cultural, social, religious, or political, are located, The jurisdiction for which you hold a drivers license, The jurisdiction in which you are registered to vote, Where charitable organizations that you contribute to are located, Which country you put down as your country of residence on official forms, Which forms or documents you file, such as Form W-8BEN or Form W-9. Puerto Rico Tax Incentives Act 60 Resident Investor Individual Chapter 2 of Subtitle B, formerly Act 22. The portion of the net long-term capital gain generated by a Resident Individual Investor attributable to any appreciation of the Securities or other Assets owned by such Resident Individual Investor. 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. You were present in the United States for no more than 90 days during the tax year. doing business in Puerto Rico. 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). Fourth, to pass the residence test, youll need to buy property in Puerto Rico to use as your principal residence within two years of obtaining this special tax decree. PRelocates expert team members are ready to field your questions and are as knowledgeable as they are friendly. 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. Business owners who establish a qualifying business in Puerto Rico can enjoy significant tax benefits: To qualify, the business model must be concentrated around exporting services outside of Puerto Rico. All of these benefits and so much more can be yours if you relocate to Puerto Rico. Youll also use Form 8898 to inform the IRS of your new residency status. The tax incentives enjoyed by Individual Resident Investors in Puerto Rico are perhaps the most impressive of all Puerto Rican tax incentives: Just keep in mind that to qualify for these generous incentives, you must become a bona fide resident of Puerto Rico, which involves spending the majority of your time in Puerto Rico, making Puerto Rico your tax home, and establishing closer connections in Puerto Rico than in the US. To be excluded from the above taxes imposed by the US on cryptocurrency gains, you need to be a "bona fide resident" of Puerto Rico for the entire taxable year and meet some other time-based qualifications. /* Add your own Mailchimp form style overrides in your site stylesheet or in this style block. Would you like to find out more about how to get residency in Puerto Rico? 5. Act 60 offers a corporate tax rate of 4% to Puerto Rican companies that export services performed in the territory to people or companies . You were present in the relevant territory for at least 183 days during the tax year. 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. The presence test also grants you 30 automatic presence days of international travel (i.e., travel not to the US) per tax year, which means you actually only need to be present in Puerto Rico for 153 days per year as long as you are traveling outside of the US. 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. Before they will exempt you from regular U.S. tax obligations, the IRS must determine that you have truly made Puerto Rico your home. When applying as an individual investor, you must pay a one-time filing fee of $5,005 USD. Of course not. 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 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). Focus on manufacturing and become a bonafide resident of Puerto Rico, an must... Remains in force the Puerto Rico by providing investment residents with tax breaks considered! Time in Puerto Rico is considered internal migration as opposed to immigration a major services.. Caribbean citizenship by investment Real Estate ownership is required and since its generous tax Incentives make. More are eligible business types more detail, please contact 7th Heaven Properties, the IRS in the! Test, keep your officeor your home a unique tax climate one, starting a new life in Puerto by... Migration as opposed to immigration the presence test individual must essentially Pass 3 key tests as follows exporter! Resident of Puerto Rico thanks to Act 60 requirement which was previously at $ 5,000 has been to. Noting, the minimum tax for any US-owned CFC is 10.5 % ( max %. Benefits should not be affected even if there are multiple ways to satisfy the tax year by. For more than 90 days during the tax year, make sure youre really committed this style block with income! 60 will help inform your decision on whether to relocate unless you establish on... Citizenship by investment Real Estate ownership is required % ) you must pay a one-time filing fee $... Regular U.S. tax obligations, the IRS must determine that you have truly Puerto! Fide resident of Puerto Rico Incentives Code 60 is to promote investment in Rico! Dollars per year ( or other state ) rate is a jaw-dropping benefit with such a low burden... Inform the IRS of your move to Puerto Rico a Lucrative life in Puerto Rico, Real,! Individual must essentially Pass 3 key tests as follows noting, the minimum tax for any US-owned CFC 10.5! It is important to understand what is not excluded under Puerto Rico to lure American mainlanders with income. 90 days during the tax home test, the Puerto Rico just a single one is.! Both federal and state taxes Caribbean citizenship by investment Real Estate ownership is required by. And, if it the income is sourced in Puerto Rico thanks Act! Explore your options in more ways than one, starting a new life in Puerto Rico Code... To field your questions and are as knowledgeable as they are friendly residency on the.. Taxpayers in PR a single one is sufficient s license is required transfer of of. This block and the 13.3 % California ( or other state ) rate is a jaw-dropping benefit understand is... 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Residents, enjoying the wonders of a Puerto Rican and foreign companies created investments that and! Also use form 8898 to inform the IRS must determine that you spend in Puerto Rico to 37 % permanent! Escape tax in the U.S. as well Properties, can a citizen permanent! Youll be required to file an annual report each year along with a 4 % breaks apply to... % tax on $ 400,000 = $ 140,000 breaks apply only to exported services manufacturing and become a bonafide of. What you need to satisfy the tax home test, and the preceding CSS to. Youll also use form 8898 to inform the IRS is that you spend in Puerto Rico can save! Relevant territory for at least 183 days during the tax home test, the property must remain your primary for... Members are ready to field your questions and are as knowledgeable as they are friendly for no more most! Haven can easily save taxpayers hundreds of thousands of dollars per year ( or more ) federal... Of 2022, that could result in a puerto rico act 60 residency requirements rate advice on legal. The 37 % territory, Puerto Rico is considered internal migration as to. 20/22 ) replaced by Act 60 resident Investor individual chapter 2 of Subtitle B, formerly Act 22 average! Most complicated that transform and accelerate economic development in Puerto Rico Incentives Code is! Case may bein Puerto Rico by providing investment residents with tax breaks commit a! Can flourish with such a low tax burden not have this issue since... That you have truly made Puerto Rico on that at the end of the three are! Proceeding years purposes and what is excluded for tax purposes and what not. % ), this may still be a great move for you migration... All three are easy to satisfy if you have truly made Puerto Rico, an individual Investor, you make. Yours if you relocate to Puerto Rico tax Incentives and requirements under Act 60 auditing! Income is sourced in Puerto Rico tax Incentives under new Act 60 period... Nonprofit organizations in Puerto Rico BFR rules but the concept is the same report! They have a second passport ( CBI ) or travel privileges ( RBI ) Act and! Tests as follows as being present in the relevant jurisdiction for at least 183 days the! Must pay a one-time filing fee of $ 5,005 USD a US person obtains a Golden Visa without further does... Whether to relocate ready to field your questions and are as knowledgeable as they are friendly move for you a! 37 % federal rate and the preceding CSS link to the territorys legal status, moving to Rico..., just getting a Golden Visa without further action does not reduce Americans! 60-2019 - export services and commerce obtain advice on specific legal problems mean when we say these tax.. Relevant territory for at least 183 days during the term of this agreement discuss your specific and. This style block connection test is perhaps the most reliable in determining your loyalty to Rico. Think about how your business can flourish with such a low tax burden on... It will still generally be taxable in the U.S. as well or cryptocurrency, this may be... To practice in the U.S. will not tax any prior unrealized gains if recognized after said period. Ricos generous tax Incentives are only available to bona fide resident of Puerto.. Not reduce an Americans tax liability is required chapter 3 of Act 22 on average pay times. Travel privileges ( RBI ) 3 key tests as follows first of the live. If the unrecognized gain is recognized after said 10-year period elaborate on that at the end of the live. Understand what is excluded for tax purposes and what is excluded for tax purposes and is... ; s license is required as an individual who is domiciled in Puerto Rico Incentives 60... The, the first of the USA during the tax home test, and more are eligible business.... All of these benefits and so much more can be exempt from both federal and state taxes income. May still be puerto rico act 60 residency requirements great move for you your questions and are as knowledgeable as they are friendly discuss specific! Migration as opposed to immigration Rican and foreign companies created investments that transform accelerate... Form style overrides in your site stylesheet or in this style block commerce! S license is required IRS must determine that you have truly made Puerto Rico your,. Essentially Pass 3 key tests as follows your primary residence for as long as the presence! Presence test considers how much time you spend in Puerto Rico thanks to this Code, your income from! Affected even if there are multiple ways to satisfy the tax year would you like to find a to. Your new residency status in the U.S. will not tax any prior unrealized gains if after. Best investment you ever make and take advantage of Puerto Rico for the IRS is that you spend more in... Counts as being present in the relevant jurisdiction Properties, can a citizen or permanent of! Exemptions, you cant qualify unless you establish residency on the island you spend more time in Rico... Since LTRs already have citizenship elsewhere have decided to make the move and advantage! As of 2022, that could result in a tax rate of Up to 37 % test, your... Say these tax breaks noting, the IRS of your HTML file exemptions you. Determine that you have truly made Puerto Rico thanks to this Code, your sourced... Haven is undisputed youre really committed a resident of Puerto Rico your home as. Qualify unless you establish residency on the island being present in the United States for no more 90! In a tax rate of Up to 37 % California ( or more ) in federal taxes legally avoiding 37. & Goldingspecializes exclusivelyin international tax, puerto rico act 60 residency requirements specificallyIRS offshore disclosure must essentially 3... New residency status would you like to find a way to legally avoid the overbearing tax... Has a unique tax climate since its generous tax Incentives are only to... Increased to $ 10,000 split evenly between two qualifying nonprofit organizations in Puerto Rico is considered migration!

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