According to the bill on fair taxation of digital assets in Puerto Rico, certain investors will need to pay local and federal taxes on capital, including from crypto assets. This law implies amendments to the Puerto Rico Tax Code, and the income from cryptocurrencies will be subject to federal laws of the United States regarding taxation. According to Velazquez, from 2020 to 2026, Puerto Rico may lose about $ 4.5 billion due to the current tax benefits for crypto-investors.
“A wave of crypto-investors did not help the restoration and strengthening of Puerto Rico’s economy. On the contrary, this led to an increase in the cost of housing and the crowding out of local residents. Almost 40% of people live in poverty on the island – and this is despite the fact that the federal government is losing billions of dollars of tax revenues, ”Velazquez said.
Puerto Rico is a non-irradiated organized territory of the United States, which is under the control of the country, but is not its state. At the same time, residents of Puerto Rico cannot participate in the US presidential election. Now the island state is considered attractive jurisdiction for crypto companies and private investors from the USA, since they may not pay income tax from cryptocurrency transactions. A business in Puerto Rico was brought up a venture investor Brock Pierce, Cryptoenfluenser Logan Paul, and the founder of Pantera Capital Dan Morehead. In February, the US Financial Committee suspected Morhead of the tax evasion.
Benefits for crypto-investors in Puerto Rico began to be provided in 2012, in accordance with the laws of the 20 and 22 Code of tax benefits, later united in the law 60. The duration of its validity expires in 2035, therefore, the Governor Puerto Ricon Jenniffer Gonzalez-Colason suggested to extend it to the prison end of 2055. At the same time, the governor considers it necessary to establish a tax increase of capital of 4%, while in the United States this tax is 37%.
Nidia Velazquez raised the topic of Puerto Rico as a “tax asylum” a few years ago. She stated that Puerto Rico became inhabited by rich cryptocurrency speculators, and urged Congress to take measures to persecute them.
Source: Bits
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