The Export Services Act of 2012 or Act 20 was established and intended to promote the exportation of services, by providing the appropriate environment and opportunities to make Puerto Rico a center for international services.
Act 20 offers a four (4)% corporate tax rate for Puerto Rico businesses providing services for exportation, 100% tax-exempt dividends from earnings and profits derived from the export services income of eligible businesses, and a 60% exemption on municipal taxes.
The Individuals Investors Tax Act of 2012 or Act 22 was established to promote the relocation of individual investors to Puerto Rico, in order to attract new residents to the Island by providing a total exemption from Puerto Rico income taxes on all passive income realized or accrued after such individuals become bona fide residents.
The incentives under Act 22 of 2012, which will expire on December 31, 2035, include 100% tax-exemption on dividends and interests and a 100% tax exemption on short-and long-term capital gains, after becoming residents. To become a new bona fide resident of Puerto Rico, an individual must have physical presence in the Island for at least 183 days of the year and must not have been a resident in Puerto Rico for the 15 years prior to the Act’s effective date.