To stop the exodus of doctors from Puerto Rico, the government has approved a new law that simplifies and accelerates the process of applying for incentives for young doctors.
The law, known as Act 106-2023, reduces the processing time for incentive applications from one year to 45 days. Doctors who qualify for the incentives can now receive an income tax exemption on the first $500,000 of their taxable net income, a total exemption from property tax on personal property, and an exemption from municipal taxes for a period of three years.
The law was passed in response to growing concerns about the shortage of doctors in Puerto Rico. In the past 10 years, more than 5,000 doctors have left the island, leading to increased wait times for medical appointments.
The new law aims to attract and retain young doctors in Puerto Rico. By simplifying and accelerating the application process for incentives, the government hopes that more young doctors will choose to stay on the island and contribute to the health care of the population.
- The law applies to doctors who are 35 years old or younger and who work as independent contractors or have their own office.
- The incentives apply to taxable net income, which is income after deducting business-related expenses.
- The income tax exemption applies to the first $500,000 of income.
- The exemption from property tax on personal property applies to property used for the business.
In addition, the law states:
Procedure for Young Entrepreneur Doctors
**(1) A streamlined procedure is provided for any Young Entrepreneur admitted to the practice of medicine, pediatrics, dentistry, or any dental specialty who submits an application for incentive grants under Section 2100.01 of this Code and meets the requirements set forth in this Section, provided that the following are included in the application:
(i) A copy of the license to practice the profession of medicine, pediatrics, dentistry, or any dental specialty issued by the Medical Licensing and Discipline Board. (ii) All supporting documents required by this Code or by regulation for obtaining a Young Entrepreneur Decree, as applicable. (iii) A sworn statement, duly attested before a Notary Public admitted to the practice of law and notary in the Commonwealth of Puerto Rico, which contains:
- A statement itemizing each document submitted to obtain the Decree and that the same were duly obtained from the pertinent authorities;
- An express statement that the applicant meets the qualifications required in subsection (c) of Section 2100.01 of this Code; and
- A declaration, under penalty of perjury, that everything stated is true and accurate.
(2) If forty-five (45) days have elapsed, counted from the date the incentive grant application process is completed and the payment of fees for the corresponding procedure has been issued, and the DDEC has not yet responded to the incentive grant application under Section 2100.01 of this Code, the Young Entrepreneur’s Decree under this Section shall be deemed automatically approved.
(3) For the time that the Young Entrepreneur has not received a copy of his or her Decree, duly approved in accordance with this streamlined procedure, he or she may use the application submitted to the DDEC, together with the sworn statement and a copy of his or her license to practice the profession, before the Department of Finance for filing tax returns or any other government compliance management in which a copy of such Decree is required.**
It’s important to note that tax laws are subject to changes and revisions, and the information regarding this law may have evolved since its period of effectiveness. Therefore, it is essential to consult with an updated tax advisor in Puerto Rico for accurate guidance on how this law may affect your tax situation.
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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.