4% fixed income tax rate
The 2008 Economic Incentives for the Development of Puerto Rico Act (EIA) provides a wide array of tax incentives and credits that enable local and foreign companies dedicated to certain business activities to operate within Puerto Rico while taking advantage of a foreign tax structure.
Businesses dedicated to the production of energy for consumption in Puerto Rico through the use of renewable sources are eligible companies under the EIA of 2008. In addition, businesses devoted to assembling equipment used to generate energy from renewable resources are eligible. The main economic incentives include:
* 4% fixed income tax rate for 15 years.
* Tax credit equal to 50% of the cost of "machinery and equipment for the generation and efficient use of energy"
* Up to 50% credit of qualified research and development expenses
* 90% exemption from real and personal property taxes for 15 years
There are additional tax credits available, including tax credits for locating in a "low industrial development zone" or for purchasing products manufactured in Puerto Rico, among others.
To apply for the benefits under the EIA, eligible companies must complete and submit an application to the [http://www.oeci.gobierno.pr/ Office of Industrial Tax Exemption]. This office will review and subsequently determine to either grant or refuse the application and related incentives.
The 2010 Puerto Rico Green Energy Incentives Act (GEI, Act No. 83) provides financial incentives through a special fund called the [http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=PR08R&re... Green Energy Fund]. As a result, as of June 30, 2010 eligible "green energy" businesses will have to choose between the new incentives provided by the GEI or those provided via the EIA as described above. Businesses are not permitted to both.