Puerto Rico Capital Gains Tax

Tax free capital gains are a big draw for investors and traders.

Puerto rico capital gains tax.

However this part of puerto rico act 60 applies only to puerto rico sourced capital gains and passive income. They have owned it for 10 years. Equally compelling income earned in puerto rico is. Capital gains taxes.

I routinely get calls from entrepreneurs about to exit who ve bought their ticket to san juan. The property is directly and jointly owned by husband and wife. Income from personal services performed within puerto rico will not be considered from puerto rican sources if it is usd 3 000 or less and the individual was present in puerto rico for 90 days or less during the calendar year. The island offers a corporate tax rate in the single digits and capital gains taxes at zero.

Long term capital gains are subject. The holding period to qualify as long term capital gain will depend on the date of sale or exchange. Puerto rico act 60 0 tax on capital gains and distributions. In arriving at effective capital gains tax rates the global property guide makes the following assumptions.

All capital gains and investment income of a puerto rican resident are taxable for puerto rican purposes. No long term capital gains tax on appreciation after you become a resident. Puerto rico has a de minimis rule to avoid sourcing to puerto rico very small amounts of income from personal services. Act 22 is billed as move to puerto rico and pay no tax on capital gains just like with act 20 that s sort of true but it s more complicated than that.

5 tax on long term capital gains realized before becoming a resident of puerto rico but recognized after 10 years of becoming a resident of puerto rico as long as recognized before january 1 2036 this 5 long term capital gain tax only applies to the portion of gain that relates to the appreciation of the property while the individual lived. To qualify you must be a bona fide resident of puerto rico for an entire tax year. Long term tax treatment will apply to those capital assets held for more than one year. It is their only source of capital gains in the country.

Puerto rico can be a haven for entrepreneurs.