Act 60, Chapter 2, is a tax incentive program for individual investors who relocate to Puerto Rico. The program offers a 100% exemption from Puerto Rico income taxes on interest, dividends, and certain capital gains.
To qualify for the program, investors must become bona fide residents of Puerto Rico. This means that they must spend at least 183 days in Puerto Rico each year. They must also establish a primary residence in Puerto Rico.
The program also allows investors to establish revocable or irrevocable trusts that are treated as grantor trusts for Puerto Rico tax purposes. This means that the investor is taxed on the income of the trust, even if the income is distributed to other beneficiaries.
Foreign trusts that are duly created under foreign laws are also recognized in Puerto Rico. This means that investors can transfer assets to foreign trusts and still qualify for the tax benefits of Act 60.
Here are some of the specific benefits of Act 60 for Resident Individual Investors:
- 100% exemption from Puerto Rico income taxes on interest and dividends.
- 100% exemption from Puerto Rico income taxes on all short-term and long-term capital gains generated after the individual becomes a bona-fide resident of Puerto Rico.
- The ability to establish revocable or irrevocable trusts treated as grantor trusts for Puerto Rico tax purposes.
- The ability to transfer or bestow freely all or some of their assets to the above-mentioned trusts.
- The recognition of foreign trusts duly created under foreign laws.
If you are considering relocating to Puerto Rico, Act 60 can be a great way to lower your taxes. Talk to us, we are accountants and tax advisors to see if you qualify and help you with the application process.
I hope this article was helpful. Is there anything else I can help you with? Feel free to reach out at [email protected] or 787-473-8985.
Disclaimer: The information provided on this website is for informational purposes only and is not legal or tax advice. You should consult with a qualified attorney or tax advisor to discuss your specific situation.