ACT 60 · PUERTO RICO INCENTIVES

If you hold a tax exemption decree in Puerto Rico, you must file an Annual Report for Exempt Businesses every year, and for most Act 60 decree holders the tax year 2025 report is due November 15, 2026. Missing it can trigger automatic fines and, ultimately, the revocation of the decree.

The Annual Report for Exempt Businesses (in Spanish, Informe Anual de Negocio Exento or IANE) is the yearly filing through which a decree holder shows the Government of Puerto Rico that it continues to meet the conditions of its decree. A decree is a contract between the decree holder and the Government. The Annual Report is how the decree holder shows, year after year, that it is keeping its side of the bargain.

The obligation comes from Section 6020.10 of Act No. 60-2019, as amended, known as the Puerto Rico Incentives Code (“Act 60”). The report is filed with the Office of Business Incentives (“OIN”, for its Spanish acronym) of the Department of Economic Development and Commerce (“DDEC”, for its Spanish acronym), via the DDEC incentives portal (“Portal”).

The 2025 filing cycle deserves attention for three reasons. First, in 2025 the OIN published new report forms for Qualified Physicians and for decree holders in industries that previously had no specific form. Second, the OIN now applies automatic fines to late reports. Third, Act 60 now requires that future reports be filed with the Puerto Rico Treasury Department (Hacienda) as part of the income tax return, a change that takes effect after this cycle.

What does this mean for your business? The tax benefits in your decree depend on filings you make every year, not only on the decree you obtained once.

Who must file

Every holder of an Act 60 tax exemption decree must. Section 6020.10(a)(3) of Act 60 extends the obligation to every exempt business holding a decree under Act 60 or any prior incentive law. Section 1020.01(a) defines prior incentive laws and lists about thirty of them, including, among others:

• Act No. 135 of December 2, 1997, the Tax Incentives Act of 1998 (Act 60 cites it as Act 135-1998; the Portal and the bulletins call it Act 135-1997)

• Act No. 73-2008, as amended (economic development incentives)

• Act No. 74-2010, as amended (tourism development)

• Act No. 83-2010, as amended (green energy)

• Act No. 27-2011, as amended (film industry)

• Act No. 20-2012, as amended (export services)

• Act No. 22-2012, as amended (resident individual investors)

• Act No. 14-2017, as amended (qualified physicians)

The obligation reaches individuals as well as entities. Resident Individual Investors, Qualified Physicians, researchers and scientists, professionals of difficult recruitment and young entrepreneurs all file. Through Informative Bulletin OIN DDEC 2025-016, the OIN confirmed that decree holders in industries that previously had no specific form now file the “Other Industries” report. That group includes tourism businesses, private equity funds, international financial entities and insurers, agro-industries, creative industries, certain infrastructure projects and air and maritime carriers.

If you are unsure which law issued your decree, check the decree itself before anything else. That fact, together with the decree’s own reporting clause, determines your deadline.

What the law says, and what the Portal offers today

Act 60 is broad, but the filing system is not yet: the obligation reaches every prior incentive law, while the Portal only offers report forms for some of them. Section 1020.01(a) includes Act No. 74-2010 (tourism), Act No. 27-2011 (film) and Act No. 185-2014 (private equity funds), and Section 6020.10(a)(3) requires all of their decree holders to file. Administrative Determination No. 26-01 confirms the obligation for every decree holder for tax year 2025.

The OIN guidance is narrower in practice. Bulletin OIN DDEC 2025-007, Part I(e), lists the prior-law reports the Portal supported: Act 22-2012, Act 20-2012, Act 135-1997, Act 73-2008 and Act 83-2010, and the beer exemption under Section 5023.04 of the Internal Revenue Code. Bulletins 2025-007 and 2025-008 then added a report for Qualified Physicians, including Act 14-2017 decrees, and an “Other Industries” report. Bulletin 2025-016 describes the Other Industries groups only by Act 60 chapter.

As of October 7, 2026, these are the only Annual Report forms enabled in the DDEC Portal, with the decrees each one names:

• Annual Report Act 20 / Act 60-2031.01: export services, Act 20-2012 or Act 60, Sec. 2031.01

• Annual Report Act 22 / Act 60-2021.01: Resident Individual Investors, Act 22-2012 or Act 60, Sec. 2021.01

• Annual Report Act 135-1997: Act 135-1997

• Annual Report Act 8-73-83-60 (Manufacturing / Green Energy): manufacturing and green energy, Acts 73-2008 and 83-2010 and Act 60

• Annual Report Act 1 (Beer Exemption): beer exemption

• Informe Anual Sección 2021.03 de Ley 60-2019 o Ley 14-2017: Qualified Physicians

• Forms labeled by Act 60 chapter: Bona Fide Farmers and Agribusinesses (Ch. 8); Hard-to-Recruit Professionals and Scientists and Researchers (Ch. 2); FCP Insurers and Financial Entities (Ch. 4); Tourism Businesses, Visitor Economy (Ch. 5); Buildings in Historic Zones and Infrastructure, and Social Interest Housing and Assisted Housing Industry (Ch. 7); Film Industry and Creative Industries (Ch. 9); Young Entrepreneurs (Ch. 10); Public Carriers and Maritime and Air Transportation (Ch. 11); and Private Equity Fund and Opportunity Zones (Ch. 4 and Secs. 6070.54 and following)

The Portal also offers an annual report extension request, which is important to note that it is not automatic just because the company or individual applied for an extension with Hacienda. In addition to there having to be an explicit need to request an extension, it is contingent on the evidence provided of an extension having applied for and granted for your income tax return. This list reflects what the firm observed in the Portal on October 7, 2026; confirm the current forms before filing.

The practical gap matters. A decree under a prior incentive law that has no form of its own, such as an Act 74-2010 tourism decree or an Act 27-2011 film decree, still carries the filing obligation. The available forms for those industries are labeled by Act 60 chapter, and the published guidance does not say which form those decree holders should use. Not finding your law on the list is not a reason to skip the filing. Confirm the correct form with the OIN or your advisor before the deadline.

What the report requires

The report asks for the information needed to confirm that you are meeting your decree’s conditions, and it must be filed together with a fee. Under Section 6020.10(a)(4)(iv), the Secretary of DDEC sets the required information by regulation, administrative order or similar communication. In practice, the content tracks the conditions in each decree, such as employment, investment, eligible activity, services rendered and purchases from Puerto Rico suppliers.

Article 6020.10(a)(4)(iv)-1 of the Incentives Regulation lists the documents to be submitted with the report, which for exempt businesses include the financial statement, the volume of business declaration, the income tax return for the year covered by the report, and a real property debt certification issued by the Municipal Revenue Collection Center (CRIM) within the 30 days before the report is filed. The requirements vary by chapter, so read the article that applies to your decree.

Beyond that, the report forms we observed in the Portal ask decree holders to attach the supporting filings for the year, as applicable: the Puerto Rico income tax return, the municipal volume of business declaration, the personal property tax return filed with CRIM, and audited financial statements. If the decree holder sold any tax credits during the year, the form also asks for copies of the sale documents and information about the buyers. Have these documents final before you open the form; a report filed without them can be treated as incomplete, and an incomplete report can be treated as not filed (Sec. 6020.10(e)).

Agreed-Upon Procedures report

On paper, the Incentives Regulation also requires an Agreed-Upon Procedures (AUP) report, prepared by a CPA licensed in Puerto Rico and included with the Annual Report, for exempt businesses whose gross income from all sources exceeds $1,000,000 and for every Resident Individual Investor with a decree under Section 2021.01 (Reg. 9248, Art. 6020.10(a)(4)-1(b), as amended by Reg. 9414). The Portal report forms do not currently ask for it as an attachment, and we have not seen OIN guidance on how the requirement is applied in practice. If you are above the threshold or hold a Resident Individual Investor decree, raise it with your CPA and advisor before the deadline instead of assuming it does not apply.

Resident Individual Investors

Resident Individual Investors with decrees under Section 2021.01 of Act 60 carry the two additional requirements below. Act No. 22-2012 decrees are different: that law was amended several times, and the donation amount, the residence requirement and other conditions depend on when the decree was granted. Some Act 22 decrees carry no residence purchase requirement at all. If you hold an Act 22 decree, read your decree; its own terms control.

Annual donation. Starting with the second tax year after receiving the decree, the report must include evidence of a donation of at least $10,000 a year to nonprofit entities that operate in Puerto Rico and are certified under Section 1101.01 of the Puerto Rico Internal Revenue Code. The donee may not be controlled by the investor or by the investor’s descendants, ascendants, spouse or partners. At least $5,000 must go to nonprofits that work to eradicate child poverty and appear on the list that the Joint Special Commission on Legislative Funds for Community Impact publishes by December 31 of each year; the full $10,000 may go to listed entities. If the investor does not give the full amount to listed entities, $2,500 goes to any other qualifying nonprofit not on that list (which may be the Special Fund for Social Equality) and the remaining $2,500 goes to the Special Fund for Social Equality. A nonprofit that works to eradicate child poverty but is not on the list may receive the $2,500 for unlisted entities, but that gift does not count toward the $5,000 child poverty portion. The donation is made directly to the nonprofit, and the investor must show the OIN that the selected nonprofit provides direct services to the community (Act 60, Secs. 2023.01(c) and 6020.10(b)).

Principal residence. Within two years after obtaining the decree, the investor must buy real property in Puerto Rico as a principal residence, alone or with a spouse, from a seller wholly unrelated to the investor. In each Annual Report, the investor must certify that he or she keeps exclusive and complete ownership of that residence for the entire life of the decree (Sec. 6020.10(c)). Under the Incentives Regulation, buying through a Puerto Rico entity wholly owned by the investor, alone or with a spouse, also counts. So does buying land and completing construction of the residence within the two years, which may be extended two more years for just cause (Reg. 9248, Art. 6020.10(a)(4)(iv)-1), however it is important that you notify the compliance of the purchase and explain that it is under construction. For Resident Individual Investor applications filed on or after January 1, 2027, the evidence must show that title is recorded, or pending recording, in the Property Registry in the investor’s name, jointly with a spouse, or in the name of a trust described in Section 2022.07 (Sec. 6020.10(c), as amended). This requirement is really important as non-compliance will revoke your decree, this includes closing after the two year term.

Qualified Physicians

Qualified Physicians (Act No. 14-2017 or Section 2021.03 of Act 60) file a dedicated report. Under Joint Circular Letter DDEC 2025-012 / Department of Health 2025-001 (September 2, 2025), a physician who wishes to keep that status must present the Department of Health’s Qualified Physician Certification with the report, along with evidence of the 180 annual hours of community service. Each Department of Health certification carries a $300 charge and must be requested by the third Tuesday of February for the prior year, a requirement compulsory starting February 17, 2026. For the tax year 2025 report only, the community service compliance certificate is not required; a sworn self-certification by the physician is sufficient. Starting with tax year 2026, the certificate must be attached.

Filing fees

The fees are set by Article 6020.01(b)(3)-1 of the Incentives Regulation, Regulation No. 9248, as amended by Regulation No. 9414 of October 27, 2022, and are paid electronically through the Portal at filing:

The $5,000 charge for Resident Individual Investors also appears in Section 6020.10(d) of Act 60.

Paying late is not a technicality. A report counts as properly filed only if it is filed on time, contains all the information Act 60 and the Regulation require, and the fee is paid on time (Reg. 9248, Art. 6020.10(a)(4)-1(d), as amended by Reg. 9414).

The information in the report is not filed and forgotten. Under Section 6020.10(a)(4), the OIN uses it for economic statistics and for the evaluation the Compliance Professional performs every two years before granting or denying the Compliance Certificate. Each year, DDEC also selects a random sample of exempt businesses, representing at least 15% of the incentives granted, for a compliance audit of their decree terms (Reg. 9248, Art. 6020.10(a)(4)-1(e), as amended by Reg. 9414).

Where to file, and the change coming in 2026

For tax year 2025, the report is filed electronically with the OIN through the Portal at incentives.ddec.pr.gov, and the fee is paid through the same Portal. The Portal also handles the extension requests and amendments to reports already filed.

That is about to change. Act No. 65-2025, amended Sections 6020.10(f) and 6070.66(d) of Act 60 to require decree holders to file the report electronically with the Secretary of the Treasury as part of their income tax return, together with the fee, for tax years beginning after December 31, 2024. The amendment allowed the Secretary of the Treasury to postpone that change for one additional year by general publication.

Hacienda and DDEC used that authority. Through Administrative Determination No. 26-01 and Administrative Order No. DDEC 2026-01, dated February 5, 2026, they postponed the new filing method so that it applies to tax years beginning after December 31, 2025. The tax year 2025 report is therefore still filed with the OIN under the rules in effect before Act No. 65-2025. Starting with tax year 2026, decree holders should expect to file the report with Hacienda as part of the income tax return.

When the tax year 2025 report is due

Your deadline depends on the law that issued your decree, the terms of the decree itself and your tax year. The decree’s own filing date always controls (Bulletin OIN DDEC 2025-008, Part I). Administrative Determination No. 26-01 confirms that, for tax year 2025, the report is filed with DDEC under one of three rules, as each decree provides:

1. Decrees under prior incentive laws: generally, within 30 days after the income tax return, including extensions, where the law that issued the decree sets that rule. Act No. 135-1997 (Sec. 14(d)), Act No. 73-2008 (Sec. 18(d)), Act No. 20-2012 (Art. 13(d)), Act No. 22-2012 (Art. 6) and Act No. 14-2017 (Art. 12) each contain a 30-day rule, with small differences in wording, and the OIN applies it as the general rule for prior-law decrees (Bulletin OIN DDEC 2025-007, Part I(a); Bulletin 2025-008, Part II). Not every prior law sets a date: Act No. 74-2010, for example, leaves reporting conditions to the Tourism Company and the decree (Sec. 9(b)), so the decree’s own clause decides.

2. Decrees under Act 60: by November 15, 2026, for calendar-year filers. This is the Act 60 rule (Act 60, Sec. 6020.10(a)(3); Reg. 9248, Art. 6020.10(a)(4)-1(a), as amended by Reg. 9414). Prior-law decree holders that amended their decrees to adopt the Act 60 date follow it too.

3. Fiscal-year filers: by the fifteenth day of the eleventh month after the close of the tax year.

The OIN applies these rules through each decree: prior-law decrees generally follow the 30-day rule of the law that issued them, and Act 60 decrees follow November 15 (Bulletins OIN DDEC 2025-007, Part I, and 2025-008, Parts I and II; DA 26-01, Part II). If your decree is unclear, file by the earlier of the possible dates. If Hacienda extends the income tax return deadline because of extraordinary circumstances, the Secretary of DDEC may also extend the Annual Report deadline (Reg. 9248, Art. 6020.10(a)(4)-1(a), as amended by Reg. 9414).

Applying those rules the way the OIN applied them to tax year 2024 in Bulletin OIN DDEC 2025-007, the tax year 2025 pattern for calendar-year filers is the following. The OIN has not issued a bulletin for tax year 2025, so these dates are computed from the prior-year method, not published by the OIN:

For tax year 2024, the OIN extended the pass-through deadline to May 15, 2025 and, because the form was published late, the Other Industries deadline to January 15, 2026, both as one-time measures (Bulletins OIN DDEC 2025-007, Part I(c), and 2025-016). No similar relief has been announced for tax year 2025. Qualified Physicians should note a difference between the statute and the OIN’s prior-year practice: for tax year 2024, the OIN listed November 15, 2025 for physicians under both Act 14-2017 and Act 60, Sec. 2021.03 (Bulletins OIN DDEC 2025-007, Part I(c), and 2025-008, Part II), although Act 14-2017, Art. 12 sets the 30-day rule. Because the decree’s own date controls (Bulletin OIN DDEC 2025-008, Part I; DA 26-01, Part II), an Act 14-2017 physician whose decree does not adopt November 15 should plan on the 30-day date. Act 14-2017, Art. 12 also lets the OIN Director grant a 30-day extension for just cause, if requested in writing before the deadline.

Two of the computed dates fall on non-business days. November 15, 2026 is a Sunday and November 14, 2026 is a Saturday, and the sources do not address whether a weekend deadline rolls forward. The deadline then extends to, November 16. If a deadline in this table has already passed and your report is not filed, act now: automatic fines grow the longer the report remains unfiled.

Extensions. A decree holder under the tax return rule that obtained an automatic extension of its income tax return from Hacienda may request a matching extension of its Annual Report through the Portal. The request must be submitted on or before the report’s original due date, must attach evidence of the tax return extension and requires payment of the $105 charge through the Portal (Bulletins OIN DDEC 2025-007, Part I(d), and 2025-008). Two prior laws also have their own extension rule: under Act No. 22-2012 (Art. 6) and Act No. 14-2017 (Art. 12), the OIN Director may grant a 30-day extension of the report for just cause, if requested in writing before the deadline and the request states the cause.

Amendments. The Portal allows a decree holder to amend a report already filed. Use it as soon as an error is detected.

Penalties and consequences

A missed Annual Report is not a minor administrative slip: it can lead to fines and, ultimately, to the loss of the decree. The exposure falls into four categories.

1. Administrative fines. Under Section 6020.10(e) of Act 60, the Secretary of DDEC may impose administrative fines up to $10,000 on any exempt business holding a decree under Act 60 that fails to file a required report or files it late. The prior incentive laws carry their own sanctions. Act No. 20-2012 (Art. 13(e)) and Act No. 73-2008 (Sec. 18(f)) each provide for a $10,000 administrative fine for reports not filed or filed late. Act No. 135-1997 (Sec. 14(f)) provides a monthly fine: $100 per month for a first violation, $250 per month for a second and $1,000 per month for a third and later violations. Act No. 14-2017 sets no specific report fine, but failing any requirement of that law, its regulations or circular letters is a ground for immediate revocation, with repayment of up to three years of taxes not paid under the decree (Art. 13). Under Act 60 and Acts 20-2012, 73-2008 and 135-1997, an incomplete report is treated as not filed if the decree holder is notified of an omission and does not supply the missing information within 15 days or reasonably justify the omission.

2. Automatic fines. Article 6020.10(a)(4)-1(c) of the Incentives Regulation, as described in Bulletin OIN DDEC 2025-016, sets an escalating process once a deficiency notice goes uncured for 15 days: an automatic $1,000 fine for each report not filed; an additional automatic $5,000 fine if, within the next 15 days, the report has not been filed and the first fine has not been paid; and, if the report and both fines remain outstanding, DDEC may begin the decree revocation process. For tax year 2024 reports, the OIN announced that the $1,000 fine would apply automatically starting January 30, 2026.

3. Suspension or revocation of the decree. Under Section 6020.09(a)(1), failure to comply with any obligation imposed by Act 60, its regulations or the decree is a ground to suspend the decree’s benefits for a period or to revoke the decree permanently. Under Section 6020.09(a)(2), revocation is mandatory when the decree holder lacks a valid Compliance Certificate after having been given reasonable time to obtain it. The decree holder has the right to a hearing before revocation (Sec. 6020.09(b)).

4. Loss of the tax benefits. This is the largest economic risk. A suspended or revoked decree can mean losing the preferential income tax rate and the exemptions on municipal license taxes and property taxes that the decree grants. The business would fall back on the ordinary rules of the Puerto Rico Internal Revenue Code and the Municipal Code, Act No. 107-2020, as amended.

There is also a business cost that rarely appears in a fine schedule. Missing or late Annual Reports surface in due diligence for financings, when requesting amendments or a certification where a compliance gap can delay a transaction or reduce its value.

Do not confuse it with these other filings

The Annual Report for Exempt Businesses is a separate obligation from the Department of State annual report and from the Compliance Certificate; filing one does not satisfy the others.

The Department of State annual report or annual fee. Corporations organized or authorized to do business in Puerto Rico under the General Corporations Act, Act No. 164-2009, as amended, file an annual report with the Department of State, and limited liability companies pay an annual fee. This is a corporate law obligation, not an incentives obligation. Falling behind can lead to penalties and loss of good standing and, if the noncompliance continues, to the cancellation of the entity, which in turn puts the decree at risk.

The Compliance Certificate. Under Section 6011.04(c) of Act 60, a Compliance Professional evaluates the decree holder’s operations every two years and, if the decree’s conditions are met, issues a Compliance Certificate. The certificate is valid for two years and must be current, and appear in the Portal, to keep the incentive. The Annual Report feeds that evaluation. A decree holder is exempt from this requirement when its business volume for a tax year is under $3,000,000, or when it has audited financial statements or an Agreed-Upon Procedures report prepared by a CPA licensed in Puerto Rico under Section 1061.15 of the Internal Revenue Code. Without a valid certificate, revocation is mandatory (Sec. 6020.09(a)(2)).

Since March 1, 2026, Certified Professionals (attorneys and CPAs registered in DDEC’s Registry of Certified Professionals) may audit a decree holder’s file and submit the resulting Compliance Certificate directly through the Portal (Circular Letter OIN DDEC 2025-015, Part II(d), Phase 4; Sec. 6020.01(j) of Act 60). A certificate issued this way does not rule out an OIN audit.

A practical compliance plan

These eight steps turn the Annual Report from a last-minute scramble into a routine filing:

1. Identify the law behind each decree. Confirm whether the decree was issued under Act 60 or a prior incentive law, and whether it was amended to adopt the Act 60 filing date, then read its reporting clause. Only your decree can confirm your deadline.

2. Put the deadlines on a compliance calendar. Anchor the report to the income tax return date for decrees under the tax return rule, and to November 15 (or the fifteenth day of the eleventh month for fiscal-year filers) for decrees under the November 15 rule.

3. Coordinate extensions. If your income tax return goes on extension, request the matching Annual Report extension through the Portal before the original report due date, with evidence of the Hacienda extension, and pay the $105 Portal charge.

4. Gather the information early. Typical items include the income tax return, the volume of business declaration, the CRIM certifications and returns that apply to your decree, financial statements, employment data, evidence of purchases and services contracted in Puerto Rico, and the documents and buyer information for any tax credit sold during the year. Resident Individual Investors also need evidence of the annual donation and, where their decree requires it, of ownership of the principal residence.

5. File through the Portal and pay the fee. Keep the electronic filing confirmation in the permanent decree file.

6. Review before you submit, and amend promptly. An incomplete report can be treated as not filed, so check every schedule and use the Portal’s amendment feature as soon as an error is detected.

7. Keep the Compliance Certificate current. Track the two-year cycle, engage your Compliance Professional on time and confirm whether an exception applies to your business.

8. Prepare for the move to Hacienda. Starting with tax year 2026, plan to file the report with your income tax return, and coordinate with your CPA now.

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