Welcome to Puerto Rico, a vibrant island with a rich cultural heritage and a warm, welcoming community. If you're a digital nomad, expat, or location-independent worker considering making Puerto Rico your tax home, this guide will walk you through the steps to establish your tax residency here. Follow these clear and concise steps to ensure a smooth transition and compliance with local laws.
Establish Physical Presence
To become a tax resident in Puerto Rico, you must be physically present on the island for at least 183 days during the tax year. Ensure you keep detailed records of your travel, including entry and exit dates, to prove your physical presence if required.
Obtain a Puerto Rico Address
Secure a residential address in Puerto Rico. This can be a rental property or a home you own. A fixed and permanent address is crucial for establishing your intent to reside in Puerto Rico.
Close Ties to Puerto Rico
Demonstrate your commitment to making Puerto Rico your primary residence. This can include obtaining a Puerto Rican driver's license, registering to vote on the island, enrolling children in local schools, and moving personal belongings to Puerto Rico.
File a Declaration of Nonresidency in Other Jurisdictions
File any necessary declarations in your previous place of residence to indicate that you are no longer a tax resident there. This can help prevent dual residency issues and clarify your intent to reside in Puerto Rico.
Change of Mailing Address
Notify all relevant institutions, such as banks, credit card companies, and government agencies, of your new Puerto Rican address. This further solidifies your claim of residency on the island.
Engage in Local Activities
Participate in local community events, join clubs, and integrate into the social fabric of Puerto Rico. This helps establish that you are making the island your home beyond just meeting the physical presence requirement.
File Puerto Rico Income Taxes
Once you have established your tax residency, ensure you file your Puerto Rico income taxes annually. Compliance with local tax laws is essential for maintaining your residency status.
Legal References
- 26 CFR § 1.937-1 - Bona Fide Residency in Puerto Rico
- Puerto Rico Internal Revenue Code of 2011, as amended
- Puerto Rico Department of Treasury Circular Letters
Useful Links
- Puerto Rico Department of Treasury
- Puerto Rico Federal Affairs Administration
- Puerto Rico Office of the Governor
