Puerto Rico Capital Gains Tax Rate

There is no tax on dividends and no capital gain tax in puerto rico.

Puerto rico capital gains tax rate.

To qualify you must be a bona fide resident of puerto rico for an entire tax year. Puerto rico collects a state income tax at a maximum marginal tax rate of spread across tax brackets. You can learn more about how the puerto rico income tax compares. Legally avoiding the 37 federal rate and the 13 3 california or other state rate sounds pretty good.

As mentioned puerto rico residents who earned income from sources outside puerto rico are subject to taxes on that portion of their income. However some big. They have owned it for 10 years. 5 tax on long term capital gains realized before becoming a resident of puerto rico but recognized after 10 years of becoming a resident of puerto rico as long as recognized before january 1 2036 this 5 long term capital gain tax only applies to the portion of gain that relates to the appreciation of the property while the individual lived.

Personal income tax rates. The following regular tax rates remain in effect for 2018 and future years. For instance if you decided to move to puerto rico in october of 2020 you would not qualify for the 0 capital gains tax in 2021 because you did not spend at least 183 days in puerto rico in 2020. Tax free capital gains are a big draw for investors and traders.

Puerto rico act 60 0 tax on capital gains and distributions. Capital gains taxes. It is their only source of capital gains in the country. Equally compelling income earned in puerto rico is.

Notably puerto rico has the highest maximum marginal tax bracket in the united states. The property is directly and jointly owned by husband and wife. Long term capital gains are subject to a special tax rate of 15. Short term capital gains are subject to the regular gradual rates.

In arriving at effective capital gains tax rates the global property guide makes the following assumptions. Puerto rico can be a haven for entrepreneurs. In the case of long term capital gains puerto rican non resident foreign nationals are subject to a flat withholding rate of 25. Unlike the federal income tax puerto rico s state income tax does not provide couples filing jointly with expanded income tax brackets.

However this part of puerto rico act 60 applies only to puerto rico sourced capital gains and passive income. Puerto rican non resident us citizens are only subject to a flat withholding rate. The island offers a corporate tax rate in the single digits and capital gains taxes at zero.