Tax Act 20/22 – How Arleen and Ted got to Puerto Rico

Oct 20, 2017 | Article

A few weeks ago while meeting with insurance industry associates at the annual ELANY conference in New York, many were curious about my husband’s and my recent move to Puerto Rico. Given all the curiosity, I decided to share how that move came about.

For years Ted and I have been vacationing in Puerto Rico, and in July 2016, we decided to buy a vacation spot in the Island. While going through the process, we kept hearing more and more about Tax Acts 20 & 22.

In a nut shell, Tax Act 20 is an incentive to get US businesses to set up shop in Puerto Rico and export their services to the mainland.

Act 20 offers:

•4% corporate tax rate

•100% tax-exempt dividends

•60% exemption on municipal taxes

•20-year decree guaranteeing these rates, with possible 10-year extension

Act 22 is for high net worth investors. It offers:

•0% tax on dividend and interest income for new Puerto Rico residents

•0% tax on short-and-long term capital gains for new Puerto Rico residents

•0% federal taxes on Puerto Rico source income

•Incredible tax savings on your investment portfolio returns

•Tax decree effective until December 31, 2035

We queried several attorneys and CPAs well versed in the Tax Acts; and once we realized how it would benefit us, we decided to go for it! We’re very excited to move forward with our new Puerto Rico venture.

We moved to this beautiful Caribbean Island in November and have made a wonderful circle of friends comprised of Puerto Rico natives as well as many that are new transplants thanks to the Tax Acts.