2023 Laws of Puerto Rico › TITLE TWENTY-THREE - Public Planning and Development (§§ 1 — 11273) › PART IX - Economic Development II (§§ 11001 — 11273) › Chapter 259 - Young Entrepreneurs Incentive and Financing Act (§§ 11191 — 11202) › § 11196 - Tax benefits for new businesses created by young entrepreneurs

New businesses that have executed a special youth business creation agreement, as defined in this chapter, shall enjoy the following incentives:
(a) Temporary income tax exemption.— New business operating under an agreement shall be exempt from the payment of income taxes for three (3) fiscal years beginning on the date of execution of the agreement. The agreement shall specify the fiscal years to which such exemption shall apply. To receive such exemption, the new business shall attach a copy of the agreement to the income tax return.
(b) Temporary municipal license tax exemption.— New business operating under an agreement shall be exempt from the payment of municipal license tax for three (3) fiscal years beginning on the date of execution of the agreement. The agreement shall specify the fiscal years to which such exemption shall apply. To receive such exemption, the new business shall attach a copy of the Agreement to the volume of business declaration for the years to which such exemption applies.
(c) Temporary personal property tax exemption.— Full exemption from the tax on the personal property of the new business for three (3) fiscal years beginning on the date of execution of the agreement. The agreement shall specify the fiscal years to which such exemption shall apply. To receive such exemption, the new business shall attach a copy of the agreement to the personal property tax return for the years to which such exemption applies.
(d) Tax exemptions provided in this section shall be attributable solely to the first five hundred thousand dollars ($500,000) of gross income earned by the new business. Any amount in excess of five hundred thousand dollars ($500,000) shall be subject to taxation at the normal rates. For purposes of determining the five hundred thousand dollars ($500,000) of gross income earned by the new business, the gross income of a controlled group of corporations shall be aggregated, in accordance with § 30044 of Title 13, and an affiliated group, in accordance with § 30045 of Title 13.
(e) Benefits shall be limited to only one new business per each young entrepreneur.
(f) Registration and permit requirement.— Any new business operating under an agreement shall meet the registration and permit requirements to operate a business, as provided in the laws and regulations of the Commonwealth of Puerto Rico.
(g) The tax exemptions provided in this section shall not be granted even if the applicant meets the requirements therefor, if at any time during the effectiveness of the agreement, he/she is availing him/herself of any economic or fiscal incentives provided under any law to promote commercial, industrial, or tourist operations in Puerto Rico, including but not limited to the following acts, as amended: the Tax Incentives Act of 1998, §§ 10101 et seq. of Title 13; the Economic Incentives Act for the Development of Puerto Rico, §§ 10641 et seq. of Title 13; the Puerto Rico Tourism Development Act of 2010, §§ 6341 et seq. of this title; the Puerto Rico Film Industry Economic Incentives Act, §§ 11001 et seq of this title; the Green Energy Incentives Act of Puerto Rico, §§ 10421 et seq. of Title 13; the Act to Promote the Export of Services, §§ 10831 et seq. of Title 13; and §§ 371 et seq. of Title 13.
History —Aug. 7, 2014, No. 135, § 8.