Puerto Rico Act 60 Explained: Decrees, Costs and 2026 Changes

"Act 60" is shorthand for Act 60-2019, the Puerto Rico Incentives Code (Código de Incentivos de Puerto Rico). It is the single law that now holds most of the island's tax incentives for individuals and businesses. If you have heard of "Act 20" and "Act 22," those older laws were folded into Act 60 in 2019.

This guide is for people weighing a move or a business relocation to Puerto Rico. It is based on the official consolidated text of the Code published by Puerto Rico's Office of Management and Budget (revision of July 16, 2026), plus guidance from DDEC and the Puerto Rico Treasury Department, known as Hacienda. 787TAX is an independent guide, not a government agency.

How Act 60 works

Benefits come through a decree. Nothing in Act 60 applies automatically. You apply, and if approved, the Secretary of DDEC signs a decree (decreto). The Code calls a decree a contract between the government and the exempt business and its owners. It spells out your benefits and your obligations, and it can be revoked if you don't comply.

DDEC runs it, Hacienda weighs in. Applications go to DDEC's Incentives Office for Businesses in Puerto Rico (Oficina de Incentivos, or OIN). Before a decision, the DDEC Secretary asks the Secretary of Hacienda for an endorsement. Hacienda also receives your annual tax returns.

Fifteen years is the default. Under Section 6020.03, most decrees last 15 years and can be extended another 15 if you complied the whole time. Some decrees have their own fixed dates instead.

Older decrees still count. A decree granted under Act 20-2012 or Act 22-2012 keeps its own terms, although the Code allows certain amendments and conversions.

The decrees people ask about most

The Code also covers manufacturing, tourism, green energy, agriculture, creative industries, financial services, hard-to-recruit professionals and researchers. Our detailed guides cover the Resident Individual Investor decree and the Export Services decree. See also our guide for young entrepreneurs and physicians.

What changed between 2022 and 2026

Act 52-2022. A broad tax bill signed June 30, 2022. For Act 60, it set June 30, 2022 as the last day to apply for new physician decrees, spelled out what the annual compliance report must contain, and changed manufacturing rates.

Act 65-2025. Signed July 17, 2025. It rewrote the reporting section of the Code (Section 6020.10). The new text includes the $5,000 annual charge on the resident investor's report, administrative fines of up to $10,000 for missing or late reports, and a move of the annual report onto the Hacienda tax return. Hacienda and DDEC postponed that last change, so 2025 reports still go to DDEC. More on that below.

Act 38-2026. Signed in March 2026, this is the big one for investors. People who apply for a resident investor decree on or after January 1, 2027 pay a fixed 4% rate on interest, dividends and post-move capital gains through January 1, 2056, instead of a full exemption. Applicants after December 31, 2026 must also show they were not Puerto Rico residents for at least six years before moving. Anyone who applied by December 31, 2026 keeps the full exemption through January 1, 2036, and the program now admits people who move as late as 2055.

Act 128-2026. Signed July 14, 2026. It widened the list of government programs through which physicians with decrees can meet their 180 yearly community service hours with pay.

What a decree costs each year

Some costs are fixed by law; others depend on DDEC's regulation or on your advisers.

Resident Individual Investor, fixed by law:

• an annual donation of at least $10,000 to Puerto Rico nonprofits, starting in the second tax year of the decree;
• a $5,000 charge on each annual report;
• the purchase of a home in Puerto Rico, within two years of the decree, as your principal residence.

For all decree holders:

• the filing fee for each annual report, set by DDEC regulation for each industry;
• $105 if you file an automatic extension of the annual report;
• fines of $1,000, then $5,000, if the report is not filed, under DDEC's regulation, with possible revocation;
• application fees set by DDEC regulation, paid through the Incentives Portal;
• professional fees for lawyers, CPAs and, for larger businesses, a compliance professional every two years.

For young entrepreneurs, DDEC reported in August 2025 that accepting the agreement costs $55.

How to apply, step by step

1. Check eligibility. Each decree has its own requirements in the Code. The resident investor rules, for example, depend on your residency history.
2. Open an account on the Incentives Portal. Applications are filed electronically at incentives.ddec.pr.gov, using the same login as Puerto Rico's Single Business Portal.
3. File and pay. The filing fee is paid in the Portal.
4. Answer requests quickly. The Code calls for a preliminary review within 5 days and gives you 10 days to supply missing information. Late answers can get an application closed.
5. Wait for review. DDEC evaluates the application and seeks Hacienda's endorsement. In 2025, DDEC acknowledged a backlog of about 14,100 cases filed through December 31, 2024, and announced steps to clear it.
6. Accept the decree. If approved, you accept it unconditionally, usually by sworn statement, then notify DDEC when operations begin or when you become a resident.

What Act 60 does not do

Act 60 is a Puerto Rico law. It does not change the Internal Revenue Code. If you are a U.S. citizen:

• Only Puerto Rico-source income of a bona fide resident is excluded from federal income tax, under IRC Section 933.
• Bona fide residency is defined in IRC Section 937 and requires passing a presence test, having no tax home outside Puerto Rico and having no closer connection to the U.S. or a foreign country.
• The IRS Large Business and International division lists an active compliance campaign on "Puerto Rico Act 22, Individual Investors Act." The IRS says it targets people who claimed Act 22 benefits without meeting Section 937 and people who report U.S.-source income as Puerto Rico-source income.

Our guide to moving to Puerto Rico explains the federal tests in more detail.

787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.