ACT 60

Act 60 of 2019, also known as the “Code of Incentives”, became a law on July 1, 2019, to gather and measure the return on investment of the Puerto Rico tax incentives acts available currently, including Acts 20 and 22 of 2012. Although it brought various changes to these Acts, applicants have the option of applying and be grandfathered under Acts 20 and 22 if they apply by December 31, 2019. Therefore, applications after January 1, 2020, will be fully subject to the provisions of Act 60 of 2019.

Main changes brought by Act 60 of 2019, also known as the Code of Incentives, to Acts 20 and 22 of 2012:

Main changes to Act 20 of 2012:

Act 20 New Code of Incentives (Act 60)
60% exemption on municipal license taxes 50% exemption on municipal license taxes.
90% exemption on real and personal property taxes on property used in the Act 20 business 75% exemption on real and personal property taxes on property used for the export, promotion, and or trade services.
No employee requirement One (1) employee required if the company’s projected or actual volume of business exceeds three million ($3,000,000)
20-year decree term, renewable for 10 years 15-year decree term, renewable for 15 years.

Main changes to Act 22 of 2012:

Act 22 New Code of Incentives (Act 60)
Individual should not have been a resident of PR six (6) years prior to January 17, 2012. Individual should not have been a resident of PR ten (10) years prior to July 1, 2019.
Annual $5,000 contribution to a certified 1101.01 PR nonprofit organization Annual $10,000 contribution to a certified 1101.01 PR nonprofit organization. $5,000 has to be donated to a nonprofit that works with the eradication of child poverty and that is listed in the annual legislative funds list released by the Joint Special Commission of Legislative Funds for Community Impact.
No residential property purchase requirement Purchase required within 2 years after the effectiveness of the Grant. Must be purchased from an unrelated person and be of exclusive domain and residential use. Can be purchased as a sole owner or jointly with a spouse.
No definition on “Securities” or on “Other Assets” Definitions are now created and capital gain exemptions are applicable to: “Securities”, which means any note, bond, promissory note, debt evidence, options, futures contracts, forward contracts, stock, and any other similar instrument or with similar characteristics, including derivative instruments adopted by circular letter, administrative determination, regulation or any other pronouncement made jointly by the Secretary of DEDC and the Secretary of Treasury. “Other Assets” means commodities, coins, and digital assets based on blockchain technology.
Decree effective until December 31, 2035 15-year decree term, renewable for 15 years.