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A few years later, Puerto Rico exempted certain prepared foods from the 4.5% surtax. Thus, as of October 1, 2019, qualifying sales of prepared foods by eligible restaurants are subject to a 7% reduced SUT rate. Prepared foods include candy, carbonated beverages, pastry products, and sweets but not alcoholic beverages.
The U.S. tax code (Section 933) allows a bona fide resident of Puerto Rico to exclude Puerto Rico-source income from his or her U.S. gross income for U.S. tax purposes.
A 100% exemption from state excise tax and sales and use taxes is provided for raw materials, machinery and equipment, fuel used for the generation of energy, chemicals used in the treatment of waste water, and energy-efficient equipment.
Contract law in Puerto Rico provides for the validity of verbal contracts be- tween private parties, with some cave- ats.
Significantly, new qualifying residents have 100% tax exemption from Puerto Rico taxes on all dividend and interest income and long-term capital gains accrued after becoming a qualifying new resident.
? Regulation 9237 issued on December 2020 In this Regulation, the Puerto Rico Treasury Department established the rules for taxpayers engaged in mail order sales to be considered a Merchant for purposes of the PR SUT (Merchant).
Along with Puerto Rico Tax Act 20, Puerto Rico adopted an additional incentive, the ?Act to Promote the Relocation of Individual Investors,? Puerto Rico Tax Act 22, to stimulate economic development by offering nonresident individuals 100% tax exemptions on all interest, all dividends, and all long-term capital gains.
Taxable items consist of tangible personal property, taxable services, admissions, digital products and ?bundled transactions.? Excluded from this definition include professional associations and certain membership fees; stamps issued by professional associations, the Commonwealth of Puerto Rico or the federal ...
In exchange, they get a 0% tax rate on capital gains such as profits from selling estate stocks or cryptocurrencies. As residents of Puerto Rico, they also save money by not paying federal income taxes, since Puerto Ricans don't have voting representation in Congress as a U.S. territory.