Act 60 2% corporate rate for small businesses with < $3M in revenue

You have to apply separately for this 2% exemption. Most lawyers, CPAs and Promotors don’t do it by default. Promoters get half of your nominal 4% corporate rate so this worsens their bottom line, hence they don’t suggest it. Here’s more detail:

Under Act 60, PYMES are defined as an eligible business with average gross receipts of $3 million or less during the previous 3 years and are subject to additional benefits during the first 5 years of operations. If an eligible business classifies as a PYME, it will enjoy the following incentives during the first 5 years of operations:

  • 2% fixed income tax rate on eligible income;
  • 100% exemption on property taxes;
  • 100% exemption on municipal taxes;
  • and up to 30% tax credits on purchases of manufactured products in Puerto Rico