Tourism

Act 74 of July 10, 2012, as amended, known as Tourism Development Act (“Act 74”)

• Act 74 and Regulation 8185 promulgated thereunder provides tax benefits to qualified individuals who carry out a “tourism activity”, as such term defined in Act 74 (among others, ownership and operation of hotels, guesthouses, condo hotels,  theme parks, golf courses, medical and nautical tourism facilities and lease of properties to any of  the above).
• The benefits available under Act 74 include:
  • Tax credits equal to 10% of the total costs of the project or 50% of the cash invested in the project, whichever is less. Tax credits may be transferred upon meeting certain requirements set forth in Act 74 and its Regulations.
  • Exemption for a period of 10 years, which may be extended for an additional 10 years, from the following taxes and levies:
    • Income Tax: Income, dividends and benefits generated as a result of tourism related activities may receive up to a 100% exemption.
    • Property Tax: Exemption of up to 90%.
    • Sales Tax: Exemption of up to 100% for imported articles used for tourism purposes.
    • Municipal Patent: Exemption of up to 100%.
    • Construction Tariffs: Exemption of up to 100% for municipal construction tariffs.
  • Exemption from the payment of stamps and fees for real property instruments filed in the Puerto Rico Property Registry.