Act 60 - Capital Gains in Puerto Rico

Puerto Rico Act 60

In January 2020, Act 20 was repealed and replaced with Act 60 Export Services, which also incorporates Puerto Rico Act 22. This Act is intended to entice high net worth individuals and businesses to Puerto Rico. Read on for a better understanding about Act 60 and how individuals or businesses contemplating a transfer to Puerto Rico can benefit from doing so.

What is Act 60?

In short, Act 60 is a bundle of tax incentives for high-net-worth individuals and companies with operations in Puerto Rico. The goal of Act 60 is to promote investment to improve the Puerto Rican economy. To achieve this goal, investors are provided with magnificent tax incentives. In other words, Act 60 was designed to bolster Puerto Rico’s development via outside investment sources.

Act 60 for Individuals

Individuals who reside in Puerto Rico and make passive income do not have to pay federal or state taxes on that income. That’s because it becomes Puerto Rican sourced income. Section 933 of the Internal Revenue Service Code states, “bona fide residents of the PR that have PR-sourced income are exempt from U.S. taxation.”

What is Passive Income?

Passive income is that which an individual is not actively involved in generating revenue. For example, savings, cash back rewards, and rental properties (if you aren’t a real estate agent).

How can I qualify?

To qualify as a resident of Puerto Rico, you must spend a minimum of 183 days per year there.


For individuals who qualify for an Act 60 decree, the benefits are:

Act 60 for Businesses

Under Act 60, eligible businesses in Puerto Rico that generate revenue from customers outside Puerto Rico can benefit from the following advantages for income generated:

Note that the product a business produced must be manufactured on Puerto Rican soil.

What are eligible businesses?

There are various eligible businesses under Act 60. Some of those are:

There are additional businesses that qualify. Ask our team for more information to learn if your business is a candidate for Act 60 tax exemptions.

Take Advantage of Act 60 Puerto Rico Tax Incentives

If you are an individual or business owner who is tired of paying excessive taxes to the U.S. government, let us here at Delerme CPA help you with creative tax planning that can legally reduce, limit, or possibly avoid U.S. taxes.

Reach out today at 939-236-3532 or visit us online for more information or to schedule a consultation.