This new bill introduced revisions to both the Act 20 and 22 tax incentive programs (and to many other incentives not covered here).
As we summarized in our previous email, the bill did NOT eliminate the existing incentives; it just made many of them more costly -- including the famous Acts 20 & 22.
Since our last email, that bill has become law, and some of the previously reported (i.e. stricter) provisional conditions are now more relaxed.
First, Puerto Rico is extending the deadline to apply for the incentives under the old rules until the end of 2019.
So if you were considering this opportunity - or kicking yourself for missing the initial deadline of June 30 - it appears you’ve just been given a breather. We confirmed that there is still time to qualify for the incentives under the old rules/cost structure, if you apply before December 31, 2019.
And second, some other requirements we mentioned last week were also relaxed, such as the employee statute for Act 20 companies. According to the final rules, only one employee will be required if your annual revenue exceeds $3,000,000 a year. A sole business owner satisfies this requirement.
In all other cases, there will be requirement to employ anyone.
We are preparing a comprehensive, up-to-date report on Puerto Rico’s tax incentives, and we should have the document ready for you in the next few weeks.
At the moment, we are combing through the new legislation and talking to all of our professional contacts on the ground. We will continue to keep you updated should anything change, since it's a fluid situation.
Stay tuned for the updated report, and do not panic if you have not yet applied. The incentives remain in place, and you should still be able to apply under the old rules until the end of this year.
Just a few days ago, we sent out a message to you regarding the newly passed Incentives Code bill in Puerto Rico. This new bill introduced revisions to both the Act 20 and 22 tax incentive programs (and to many other incentives not covered here). As we summarized in our previous email, the bill did…