Export Services (Act 20)

The “Export Services Act”  was designed to create a World Class International Service Center. The Act provides tax exemptions and tax credits to businesses engaged in export services, including but not limited to:

• Research and development
• Advertising and public relations
• Graphic design
• Professional services such as legal, tax and accounting services
• IT and software development
• Telecommunications
• Call centers
• Shared service centers
• Medical, hospital and laboratories services
• Investment banking and other financial services

Any service enterprise exporting services is eligible and may qualify for the benefits of the Act. Eligible activities can benefit from the following benefits on income derived from customers located outside of Puerto Rico:
• 4% fixed income tax rate
• 3% fixed income tax rate in the case of services considered strategic
• 100% tax exemption on distributions from earnings and profits
• 90% tax exemption from personal property taxes for certain types of businesses (100% tax exemption for the first five years of operation)
• 90% tax exemption from real property taxes for certain types of businesses (100% tax exemption for the first five years of operation)
• 60% tax exemption on municipal taxes (90% tax exemption if business operates in the industrial development zone constituted by the municipalities of Vieques and Culebra).

For more detailed information about the benefits of Act 20, please contact us.

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