Puerto Rico law
Tax Laws in Puerto Rico.
Puerto Rico has a distinctive tax system: PR residents do NOT pay U.S. federal income tax on PR-source income (under the Internal Revenue Code's § 933 exclusion). However, PR residents pay Puerto Rico income tax at graduated rates up to 33%. Federal income tax applies to U.S.-source income. Puerto Rico imposes a Sales and Use Tax (IVU) at 11.5% (10.5% state + 1% municipal). Act 60 provides reduced rates for qualifying individuals and businesses. Puerto Rico has its own estate tax (unlike stateside repeals). Property taxes are administered by CRIM.
Last verified: 2026-04-17
State law
Key Puerto Rico Statutes
Comprehensive Puerto Rico tax code. Individual income tax rates graduated 0% to 33%. Corporate income tax up to 37.5% (combined standard rate).
Bona fide Puerto Rico residents who meet presence, tax-home, and closer-connection tests are exempt from U.S. federal income tax on Puerto Rico-source income. U.S.-source income remains subject to federal tax.
Puerto Rico imposes an Impuesto sobre Ventas y Uso (IVU) at 11.5% combined (10.5% state + 1% municipal). Broad base covering goods and many services.
Consolidates Puerto Rico tax incentive laws. Notable: (1) Chapter 2 (export services) providing 4% corporate tax + 100% dividend exclusion for qualifying businesses; (2) Individual Investor provisions providing 0% capital gains tax for qualifying new PR residents.
Puerto Rico imposes its own estate tax on the worldwide estate of PR-domiciled decedents (and on PR-located property of non-domiciled decedents). Rates vary; exemptions apply for spouse transfers.
Real and personal property tax administered by CRIM (Centro de Recaudación de Ingresos Municipales). Funds municipal governments.
State law
Official Sources
Not Legal Advice
This page summarizes publicly available statutes and rules for informational purposes only. It does not constitute legal advice, and no attorney-client relationship is created by viewing this content. Laws change — always verify with the primary source or consult a licensed attorney in Puerto Rico.
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