Chapter 5 of ACT 60 is 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 seeks to facilitate the development of world-class tourism projects, ensuring a 15-year term for these benefits, with the option to request an additional extension. Here we explore the eligibility criteria and specific incentives that promise to transform Puerto Rico into an even more vibrant and attractive tourism destination.
Eligibility for Tourism Incentives
Activities considered eligible to take advantage of ACT 60 benefits span 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 within hotels.
- Sports tourism, nautical and other tourist facilities in port areas.
- Agro-hospice initiatives, agro-tourism, health tourism, and sustainable tourism and ecotourism development.
- eSports and Fantasy Leagues activities, among others.
Incentives Available
Eligible participants in the tourism sector can access a number of significant incentives, such as:
- Tax Credits: between 30% and 40% of eligible tourism investment.
- Municipal and Special Tax Exemptions: Up to 75% exemption on construction taxes and up to 100% exemption on sales and use taxes.
- Fixed 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.
- Profits on the Sale of Assets: Tax rate of 4% on profits from the sale of assets or interests of the company.
- Special Withholding on Royalties: Special rate of 12% 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 presented as a key tool for the promotion and development of tourism in Puerto Rico. Through these incentives, it seeks to attract investments that contribute 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 is thus positioning itself as a premier tourism destination, ready to host a variety of initiatives that will enrich both the visitor experience and the economic well-being of the local community. 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.
