Tax Savings for Individual Investors

Chapter 2 of Act 60 for Individual Investors provides 100% tax exemption from Puerto Rico income taxes on all interest and dividend income and on certain capital gains realized and accrued after such individual becomes a bona fide resident of Puerto Rico. Chapter 2 applies to any individual investor who becomes a Puerto Rico resident (“Individual Investor”) on or before the taxable year ending on December 31, 2035, provided that the individual was not a resident of Puerto Rico at any time from January 17, 2006 to January 17, 2012.

A Puerto Rico resident is an individual who is domiciled in Puerto Rico.  Physical presence in Puerto Rico for a minimum period of 183 days during the taxable year will create a presumption of residence in Puerto Rico for Puerto Rico income tax purposes.

Section 933 of the U.S. Internal Revenue Code of 1986, as amended (the “US Code”) provides that income derived from sources within Puerto Rico by an individual who is a bona fide resident of Puerto Rico during the entire taxable year is not included in gross income and is exempt from federal income. This opportunity is under the US Code (the “Section 933 Exclusion”).  An individual is treated as a bona fide resident of Puerto Rico under Section 933 if the person (1) meets a physical presence test; (2) does not have a tax home outside of Puerto Rico during the taxable year; and (3) does not have a closer connection to the United States or a foreign country than to Puerto Rico.

For entrepreneurs, opportunities for tax-efficient investing are abound in Puerto Rico. Individuals who qualify do not pay any short or long term Capital Gains Tax nor tax on interest and dividends.

Upon your application approval, you must meet certain requirements:

• Make an annual donation of a minimum of $10,000 to local nonprofit.
• Purchase Real Estate Property within the first two years.
• File an annual report with a filing fee of $5,000.

This program will end on December 31, 2035 if not renewed.

If you believe you can meet these requirements, we can explain the process, gather the necessary document with your help and then submit the application to the Government.

Please contact us by email at peter@criterionadvisorsgroup.com, by telephone by calling 939-391-1680 or complete our Contact Form for additional information.