Act 60 Puerto Rico: here you will find what it is, the requirements, the tax benefits for resident investors and how to apply for the decree. In addition, we explain the Act 38-2026 changes and the December 31, 2026 deadline.
What Is Act 60 in Puerto Rico?
Act 60 of 2019 is the Puerto Rico Incentives Code and was signed on July 1, 2019. It also brought together the incentives that Acts 20 and 22 used to give. Therefore, many people still call it "Act 22" or "Act 20". To receive the benefits, the eligible person or company must apply for a tax exemption decree from the Department of Economic Development and Commerce (DDEC).
Act 60 Puerto Rico Tax Benefits
- Resident individual investors: preferential rates on dividends, interest and capital gains.
- Export services: a flat 4% rate on the net income of eligible services.
- Other incentives, for example for physicians and young entrepreneurs, with their own requirements.
However, the benefits depend on your decree and on the date you apply. For that reason, review each case with an attorney and a CPA.
Act 60 Puerto Rico Requirements for Individuals
- Move to Puerto Rico and become a bona fide resident.
- Be physically present on the island at least 183 days a year.
- Show six years without Puerto Rico residency before you move, if you apply from January 1, 2027.
- Buy a principal residence in Puerto Rico within two years after the decree.
- Make an annual donation of $10,000 to nonprofit organizations in Puerto Rico.
Before 2027, a different look-back window applied. So, confirm which one applies to you.
How to Apply for Act 60 in Puerto Rico
- Confirm your eligibility with an attorney and a CPA.
- Prepare the decree application and file it with the DDEC, with its exhibits and fees.
- Establish your residency on the island and meet the 183 days a year.
- Buy your principal residence within two years of the decree.
- File the annual report with the DDEC and meet the annual donation.
Act 60 Puerto Rico Capital Gains
The rate depends on when you file. If you file by December 31, 2026, interest, dividends and capital gains earned after you become a resident have a 0% rate through December 31, 2035. In contrast, if you file from January 1, 2027, the rate is 4% through December 31, 2055. Also, gains earned before you became a resident and recognized after 10 years as a resident are taxed at 5%. To estimate your case, use the Act 60 tab in our mortgage, closing cost and Act 60 calculator.
Act 38-2026: What Changes If You Apply After December 31, 2026?
Act 38-2026 became law on March 10, 2026, and amends the Incentives Code and extends the resident investor program to 2055. In addition, it changes the treatment of new applications from January 1, 2027. As a result, the rate rises from 0% to 4% and applicants must show six years without Puerto Rico residency. Also, the principal residence must be held by the individual or by a trust. Existing decrees keep their terms, and holders may ask to modify them to adopt the new regime. Some legal sources say the law was still subject to final approval by the Fiscal Oversight Board, so confirm its current status.
Act 60 Export Services: 4% Tax Rate
Eligible companies that provide services for export enjoy a flat 4% income tax rate on that net income. Besides, they must obtain a tax exemption decree. Therefore, review the requirements for your type of service with a tax professional.
Act 60 and Buying Property in Puerto Rico
As an investor you must buy a principal residence within two years of the decree. For that reason, plan the purchase early. At Puerto Rico Real Estate we help you compare areas such as Dorado and more of Puerto Rico. Also, estimate your closing costs with the Puerto Rico mortgage calculator. You can call us at 787-598-4024.
Act 60 Puerto Rico FAQ
What is Act 60 in Puerto Rico?
It is the 2019 Puerto Rico Incentives Code. Also, it gives tax incentives to investors, physicians, companies and others through a decree.
What are the Act 60 requirements?
For an individual, the main ones are to live in Puerto Rico, be present 183 days a year, buy a residence and donate $10,000 a year. In addition, six years without prior residency are required from 2027.
How do I apply for Act 60 in Puerto Rico?
You file a decree application with the DDEC with the help of an attorney and a CPA. Thus, the decree sets your benefits and your obligations.
Does Act 60 apply to capital gains?
It depends on your filing date. Through December 31, 2026, the rate on gains after you become a resident is 0%; from 2027 it is 4%.
Informational content. Puerto Rico Real Estate is not a law firm or a CPA firm, and this is not legal or tax advice. Confirm current figures with the DDEC, Hacienda and your advisors. Sources: InCorp, Act 38-2026 changes and MZLS, program extended to 2055.