Promoted and signed by Governor Luis Fortuno in 2012,
4 AUG 2016 by..
Manuel López-Zambrana Camille Álvarez
Act 22 seeks to attract new residents to Puerto Rico by providing a total exemption from Puerto Rico income taxes on all interest and dividends realized after the individual becomes a bona fide resident of Puerto Rico.
An individual who was not a resident of Puerto Rico from January 17, 2006 through January 17, 2012 may request a decree of tax exemption (an Act 22 Decree) under Act 22, and qualify for the following benefits:
100 percent tax exemption with respect to interest and dividends derived after becoming a resident of Puerto Rico and through December 31, 2035
100 percent exemption with respect to gains from the sale of property acquired after the individual became a resident of Puerto Rico, if the sale takes place before January 1, 2036.
The application for an Act 22 Decree must include the payment of a $750 filing fee as well as the payment of an additional $5,000 upon the issuance of the Act 22 Decree. The benefits of Act 22 are also conditioned on the individual complying with the requirements of acquiring residential property in Puerto Rico and opening a bank account in Puerto Rico.
Bona fide resident of Puerto Rico
Under the US Internal Revenue Code (IRC), citizens of the United States are generally taxed on all of their income, from whatever sources derived. US IRC Section 933, however, provides an exception with respect to Puerto Rico residents: individuals who are bona fide residents of Puerto Rico for the entire taxable year,
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