Professional Documents
Culture Documents
A. Overview
• Tax exemption decrees are essentially a contract with the Puerto Rico
government.
• The Constitution of Puerto Rico states that the government cannot enact
future laws impairing the obligation of its contracts.
• Therefore, tax benefits that are granted must be secured for the duration of
decree.
B. Tax Benefits
C. Eligibility
• Requirements:
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Act 20/22
D. Attorney Fees
ACT 22-2012
A. Overview
B. Tax Benefits
Ø Interest and dividends that qualify as Puerto Rico source income will
not be subject to federal income taxation.
Ø Interest from US and foreign corporations are exempt from PR tax (may
be subject to federal taxes).
• 100% tax exemption on all short term and long- term capital gains accrued
after becoming a new resident
Ø Pre-domiciled gains are taxed at Puerto Rico rates (5% tax may be
granted after 10 years)
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Act 20/22
C. Trusts
• Grantor Trusts:
Ø Investor can elect that such trusts be treated as grantor trusts for
purposes of Puerto Rico income taxes.
• Investor may freely transfer or donate during his/ her life, at his/her
complete discretion, all or part of his/hers goods to any of the
abovementioned trusts.
• Such transfer or donation may be made without regard to Puerto Rico laws
or regulations to the contrary.
D. Eligibility
E. Attorney Fees
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Act 20/22
A. Process
• Attorney with review with client the available legal entities to do business
in Puerto Rico
• Draft of all necessary external and internal documents for the organization
of the selected legal entity
B. Attorney Fees