PUERTO RICO MEDICAL PROFESSIONALS’ INCENTIVES

BRIEF SUMMARY
TAX INCENTIVES ACT FOR THE RETENTION AND RETURN OF MEDICAL PROFESSIONALS
(Act 14, February 21, 2017)

On February 21, 2017, the Governor of Puerto Rico signed into law the INCENTIVES ACT FOR THE RETENTION AND RETURN OF MEDICAL PROFESSIONALS (“Act 14-2017”). Tax benefits under this Act state that a qualified physician covered by a Tax Exemption Decree issued by the Department of Economic Development and Commerce (“DEDC”) will benefit from a fixed 4% income tax rate on Eligible Income generated in the offering of professional medical services.

Eligibility:

  • Qualified physicians admitted to the practice of medicine, podiatry or an odontology specialty in a full-time capacity.
  • Physicians who are doing their residency within a duly credited program.


Benefits:

  • Fixed (4%) income tax rate on Eligible Income generated in the offering of professional medical services.
  • Dividends Exempt from income tax for up to $250,000.
  • Benefits will last for an initial 15-year term.


Requirements:

  • The physician must maintain his/her status as a “qualified physician”;
  • Practice medicine full-time;
  • Remains a Puerto Rico resident;
  • Fully complies with his/her tax responsibilities;
  • Complies with a 180 hours community service requirement; and
  • Complies with any other requirement imposed by the Tax Exemption Decree.


Determination of Eligibility:

The Department of Economic Development and Commerce (“DEDC”) will guide its determination on whether the issuance of said Decree results in the best economic and social interests of Puerto Rico by considering the following:

  • The economic impact of granting the decree
  • The specialty field of the requesting physician
  • Shortage in Puerto Rico of the medical specialization
  • Geographical area served or to be served by the physician