Saturday, December 13, 2014

Modifications to Acts 20/22 Incentives

On November 21st and  November 24th, 2014, Senate bills 864 and 1020 were sent to La Fortaleza for the governor's signature.  These bills will work to broaden the pool of people and companies eligible for Acts 20/22 incentives. Among the modifications to the Acts is a reduction in the minimum time one must have lived away from Puerto Rico to qualify for incentives.  The incentives include exemptions from passive investment income taxes, including capital-gains.  Presently the time period away from PR is 15 years, the amendments will reduce it 6 years. In addition there are modifications to Puerto Rico's mandatory inheritance laws.  

Act 1020  has provisions to allow trading companies,  distribution and logistics, assembly, and bottling and management services as types of businesses and services eligible for of Act 20/Act 73 incentives.  These incentives reduce the corporate tax rate to 4% on income generated from the export of certain professional services, including but not limited to financial, legal, and technology services.  

There are more rules and this post contains simplifications and is not comprehensive and my be forward looking. Additionally, as always, a professional should be consulted and be presented with specific information.

 

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Disclaimer

The information on this website is general information and is for educational use only and has not been verified for accuracy nor completeness. You, the reader, should further research your specific individual situation. In addition you should contact your accounting professional for professional advice derived from specific details from your structure and financial position.

 

IRS CIRCULAR 230 DISCLOSURE:

To comply with requirements imposed by the Department of the Treasury, Isla CPA informs you that any U.S. tax advice contained in this post (including any attachments) is not intended or written by the practitioner to be used, and that it cannot be used by any  taxpayer, for the purpose of (i) avoiding penalties that may be imposed on the taxpayer, and (ii) supporting the promotion or marketing of any transactions or matters addressed herein.



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