Benefits of Living in Puerto Rico

Over the last years, several things have been written about shifting to Puerto Rico as a tax haven. Approximately 2000 Americans moved to Puerto Rico for this reason in order to reduce their US tax bill.

The main reason is that to take benefit of the tax breaks this place offers, Americans have to meet a specific set of criteria and follow a specific set of rules. Here, you will find the benefits of moving to Puerto Rico and experiencing Puerto Rico luxury rentals:

Status and Tax Rules

It is worth knowing the nature of Puerto Rico’s relationship with the United States.

Puerto Rico is a territory of the US. It means that it is governed by the United States in some ways but independent in others. The people of Puerto Rico have voted to become a United States state more than once; however, the United States government has not so far changed the status quo.

The ambiguous political status of Puerto Rico leaves room for tax benefits. The tax system of Puerto Rico is independent of the US. While American citizens are needed to file US taxes on their global income wherever in the world they live – an agreement between Puerto Rico and the United States means that Americans who are bona fide residents of Puerto Rico do not have to file the United States on their Puerto Rican income.

In addition, as an extra incentive, Puerto Rico has a tax break program for American business owners who move to Puerto Rico and set a business in Puerto Rico that offers services outside the territory.

Previously known as Act 20 and 22, now known as Act 60, Americans who move a qualifying business to Puerto Rico will pay 4% corporation tax and no tax on capital gains, interest, dividends, and royalties. When talking about the right business, and if set up in a proper way, this can lead to important tax savings.

Do US Residents living in Puerto Rico have to file taxes?

In addition, Americans who become residents of Puerto Rico don’t have to file United States taxes on their Puerto Rican income. Also, you must spend at least 183 days in Puerto Rico in a year, not have a tax in the home another country, and not have quicker connections with another country.

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Created on Apr 29th 2021 03:33. Viewed 271 times.

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