Puerto Rico recently approved Legislation, which grants substantial income tax benefits to individual investors not previously resident of Puerto Rico.
These individuals can benefit from total income tax exemption through year 2035 on their worldwide income consisting of interest and dividends, including dividends from qualifying registered investment companies, and interest, finance charges, dividends and partnership profits from entities under the Puerto Rico International Banking Center Act.
In addition, long-term appreciation in the value of securities occurring prior to establishing Puerto Rico residency, if recognized after ten years of Puerto Rico residency and before January 1, 2036, is subject to a five percent tax. Moreover, long-term appreciation in the value of securities occurring after establishing Puerto Rico residency is totally exempt from tax, if recognized before January 1, 2036.
These individuals can benefit from total income tax exemption through year 2035 on their worldwide income consisting of interest and dividends, including dividends from qualifying registered investment companies, and interest, finance charges, dividends and partnership profits from entities under the Puerto Rico International Banking Center Act.
In addition, long-term appreciation in the value of securities occurring prior to establishing Puerto Rico residency, if recognized after ten years of Puerto Rico residency and before January 1, 2036, is subject to a five percent tax. Moreover, long-term appreciation in the value of securities occurring after establishing Puerto Rico residency is totally exempt from tax, if recognized before January 1, 2036.
This only applies to an individual who is domiciled in Puerto Rico, who has been present in Puerto Rico for a period of 183 days during the calendar year and who has not been resident of Puerto Rico for the last fifteen years and become resident no later than December 31, 2035.
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