On Friday, April 4, 2025, Puerto Rico Governor Jenniffer González-Colón, alongside members of the Tax Reform Committee, held a press conference to present a series of 13 legislative measures aimed at simplifying and transforming Puerto Rico’s tax system.

One of the key proposals involves extending Act 60 of 2019 until December 31, 2055, which is currently set to expire on December 31, 2035. Under the new proposal, starting in 2026, new applicants would be subject to a 4% tax rate on capital gains, as well as Puerto Rico-sourced interest and dividends. Additionally, new applicants would be required to certify that they were not residents of Puerto Rico for the six years preceding the enactment of these new measures to qualify as a new resident investor.

Importantly, current Act 60 grant holders will not be affected by this proposal for the duration of their existing grants. However, when negotiating the renewal of their grants, they would possibly be subject to the proposed 4% tax rate.

During the press conference, the recently appointed Secretary of the Department of Economic Development and Commerce, Sebastián Negrón Reichard, expressed confidence that the new tax rate will still be an attractive option for future investors, while also generating an estimated additional $200 million in tax revenue.

Another major proposal aimed at promoting investment and the retention of capital in Puerto Rico is the introduction of a special, fixed 4% tax rate on Puerto Rico-sourced interest and dividends, as well as certain long-term capital gains. This tax rate would be voluntary, allowing taxpayers to choose whether to apply it on their annual income tax returns. With this measure, Governor González, Secretary Negrón, and the rest of the Tax Reform Committee emphasize their commitment to reducing the tax burden on local taxpayers while aligning the tax treatment of local residents and Act 60 beneficiaries.

Other key measures introduced include tax exemptions for non-profit entities and certain health services, increased deductions for individual savings, and simplified processes for compliance with local taxes.

The proposed legislative measures are set to be reviewed and potentially approved by both chambers of the legislature this week, with additional measures expected to be presented throughout the remainder of the year.