Chapter 5 of ACT 60 has been designed to revitalize and promote the tourism sector in Puerto Rico by offering an attractive package of tax incentives and benefits for tourism initiatives. This framework aims to facilitate the development of world-class tourism projects, ensuring a 15-year term for these benefits, with an additional extension through request. We will address the selection criteria and the specific incentives to make Puerto Rico a more appealing and attractive destination for tourism.
Selection for Tourism Incentives
Activities considered advantageous regarding the ACT 60 benefits cover a wide range, including:
- Lodging establishments, such as guest houses, hotels, and bed and breakfasts.
- Theme parks, golf courses associated with hotels or resorts, and casinos in hotels.
- Sports and nautical tourism and other tourist facilities in port areas.
- Agro-hospice initiatives, agro-tourism, health tourism, and development of sustainable tourism and ecotourism.
- eSports and Fantasy Leagues activities, among others.
Available Incentives
Eligible participants in tourism can access several significant incentives, such as:
- Tax Credits: Between 30% and 40% of eligible tourism investment.
- Municipal Taxes and Excise Duty Exemptions: Up to 75% exemption on construction taxes and up to 100% exemption on sales and use taxes.
- Flat Income Tax Rate: Benefit of a 4% tax rate on income.
- Full Exonerations: 100% exemption on dividends or income distributions, as well as on real estate and personal property taxes.
- Energy Incentives: Full exemption on petroleum products used as fuel for tourism activities.
- Benefits on the Sale of Assets: 4% tax rate on profits from the sale of assets or interests of the company.
- Special Withholding on Royalties: 12% special rate on royalties paid to foreign entities.
- Financing Bonuses: Exemption on income and municipal taxes on income from financing tourism projects.
- Exonerations in Legal Documentation: 90% exoneration in the payment of internal revenue and notary stamps.
Conclusion
Chapter 5 of ACT 60 is a key tool to promote and develop tourism in Puerto Rico. These incentives aim to attract investments contributing to the expansion and diversification of the island’s tourism offerings, creating an environment conducive to the development of innovative and sustainable projects. Puerto Rico thus stands as a premier tourism destination, ready to host several initiatives enhancing both the visitor experience and the economic well-being of the local community. Along with these efforts, the island aims to strengthen its reputation as an ideal place for tourism, taking advantage of its rich culture, natural beauty, and unparalleled hospitality.