Act 20 - Act to Promote the Export of Services

International business people

Act 20 was designed to connect Puerto Rico with the global economy by offering big tax breaks to certain types of service companies that conduct business from the island. The industries that meet the criteria include research and development, call centers, financial services, advertising, architecture and engineering, storage and distribution, and many others.

Delerme CPA, LLC can show you how to arrange your Puerto Rico service business in a way that allows you to qualify for the best tax incentives. We are highly experienced in tax reduction strategies and will find every legal loophole possible to help you save big.

Act 20 Tax Incentives

The tax benefits of Act 20 are plentiful and far-reaching. Puerto Rico is offering a guarantee on these rates that's good for two decades and renewable for another 10 years under certain conditions. These include:

  • 4% corporate tax rate
  • 100% tax exemption on dividends
  • 60% exemption on municipal taxes
  • No federal taxes on Puerto Rico source income

Some export service businesses are also eligible for a 100% exemption on property taxes for the first 5 years and a 90% exemption thereafter.

Is Your Business Eligible for Act 20 Tax Breaks?

To qualify for the tax benefits from Act 20, foreign-based and local businesses must meet certain requirements including:

  • The services the business provides must be offered from Puerto Rico to recipients outside the island
  • The business must file an annual report including certifications, licenses, permits, and registrations
  • The owner must take a reasonable salary

Corporate Tax Benefits in Puerto Rico

At Delerme CPA, LLC, we can explain how to qualify to save money on taxes with the incentives offered through Act 20. We'll walk you through each step to help make sure your business gets all the tax savings possible in Puerto Rico.

Call us now at (404) 445-8095 or request your free consultation online to learn more. Our CPA firm has offices in the United States and Puerto Rico.