0% Taxes in Puerto Rico
Tax-free earnings in Puerto Rico (0%)
Income distributed to investors—both U.S. and non-U.S.—is not subject to income tax in Puerto Rico, as the projects are developed under the Opportunity Zones Program.
Shareholders or partners of a corporation or partnership that is an exempt business shall not be subject to income tax on distributions of dividends or profits from the profits and benefits generated by their net income from opportunity zones of such exempt business.
Subsequent distributions of profits and benefits generated by net income from opportunity zones carried out by any corporation or partnership shall also be exempt from all taxation.
Visual Summary:
- 0% income tax in Puerto Rico
- Applies to U.S. and non-U.S. investors
- Benefit granted by law under the Opportunity Zones Program
Tax benefit for projects (18.5%)
Companies developing projects are taxed at a reduced rate of 18.5% in Puerto Rico when operating under the Opportunity Zones Program (Law 60). This lower tax burden improves the profitability, stability, and financial viability of real estate projects.
An exempt business shall be subject to a fixed income tax rate on its net income from opportunity zones of eighteen point five (18.5%) percent instead of any other tax imposed by the Internal Revenue Code.
Visual summary:
- Development companies pay only 18.5% tax in Puerto Rico.
- Benefit granted by the Opportunity Zones Program (Law 60)
- Lower tax burden = greater profitability and stability for the project
Partial property tax exemption for projects (25%)
Thanks to the Opportunity Zones Program (Law 60), projects pay 25% less in property taxes, reducing costs and improving profitability.
“The movable property of an exempt business used in the development, organization, construction, establishment, or operation of the activity covered under the decree shall have a twenty-five (25) percent exemption on municipal and state property taxes.”
Visual Summary:
- 25% less in property taxes in Puerto Rico
- Applies to assets used in the development and operation of the project.
- Lower operating costs = higher project profitability
Municipal tax reduction for projects (25%)
Projects pay 25% less in municipal taxes, reducing costs and improving profitability.
Exempt businesses shall receive a twenty-five (25) percent exemption on municipal licenses, municipal taxes, and other municipal contributions imposed by any municipal ordinance.
Visual Summary:
- 25% less in municipal taxes in Puerto Rico
- Applies to patents and other municipal taxes related to the project.
- Lower municipal costs = higher project profitability